Wall Street surged on Wednesday as investors shrugged off stronger-than-expected inflation data and snapped up shares of Facebook, Amazon.com and Apple.
The fourth straight day of gains in the S&P 500 saw a return to the "fear of missing out" mentality that accompanied Wall Street's rally in recent months ahead of a slump last week into correction territory.
Facebook jumped 3 percent while Amazon.com and Apple rose more than 1 percent. All three fueled the S&P 500 more than any other shares. They, along with Netflix and Alphabet - collectively called the FAANG stocks - were major contributors to last year's market rally, and some of them have weathered the recent selloff better than the broader market.
"FAANG is still working. And people feel that because they held up during the downturn, you can come back to them and not get hammered if things turn down again," said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta, Georgia.
"There is still a fear of missing out."
The Labor Department's core Consumer Price Index, which excludes the volatile food and energy components, increased 0.3 percent in January, while economists polled by Reuters had forecast an increase of 0.2 percent. However, the year-on-year rise was unchanged at 1.8 percent.
The data raised the specter of rising inflation rates and rekindled fears that the Federal Reserve could be forced to be more aggressive with interest rate increases.
But those inflation concerns were tempered by data showing U.S. retail sales fell 0.3 percent last month, the biggest decline in nearly a year and in sharp contrast to economists' estimates for a 0.2 percent increase.
"The CPI shows there is some inflation, but it was not through the roof," said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Nashville. "People got too pessimistic."
Underpinning confidence among many investors is the belief that the U.S. economy remains strong and that tax cuts enacted this year will spur corporate earnings and lead consumers to spend more.