Wall Street's Rebound: Small-Caps and Financial Stocks Surge Amid Tech Decline

Wall Street's key indices surged as financial stocks and small-cap companies posted notable gains, countering declines in technology megacaps. Morgan Stanley reached a record high on strong earnings, while regional banks and utility sectors also climbed. Investors rotated from elevated tech stocks to diversified sectors amid expanding economic optimism.

Wall Street's major indices rebounded on Wednesday, led by strong performances from small-cap companies and financial institutions, which offset declines in tech giants.

Morgan Stanley soared 6.5% to a record high after reporting robust earnings, benefiting from a spike in investment banking revenue. Regional banks rose as well, with First Horizon and U.S. Bancorp seeing increases following positive third-quarter results.

As tech megacaps faltered, chip company Nvidia bucked the trend, climbing 3.4%. Investors are eyeing diversification opportunities amid expectations of a brighter economic outlook, with key data on retail sales and industrial production expected soon.

(With inputs from agencies.)