Stocks gain ground, recouping some of last week’s decline
Stocks rose broadly on Wall Street on Tuesday, recouping some of the ground lost in their worst weekly decline since the start of the pandemic.
The S&P 500 was up 2.4% at 10:11 a.m. EST. The Dow Jones Industrial Average rose 508 points, or 1.7%, to 30,402 points and the Nasdaq jumped 2.9%.
Tech stocks have seen some of the biggest gains. Apple rose 3.6% and Microsoft 2.5%.
Retailers, healthcare companies and banks also made strong gains. Kellogg rose 2.1% after the maker of Frosted Flakes and Rice Krispies announced it would split into three companies. Spirit Airlines rose 7.3% after JetBlue softened its bid for the low-cost airline.
European markets were also up and Asian markets closed mixed overnight. The 10-year Treasury yield rose to 3.30% from 3.23% on Friday night. Markets were closed on Monday for the June 19 observation.
More than 90% of stocks in the benchmark S&P 500 index gained ground. The index is still stuck in a slump, like every other major index, and is still down about 22% from the record high it set in January.
Stocks have generally fallen as investors adjust to higher interest rates that the Federal Reserve and other central banks are increasingly handing out. The aggressive rate hikes are part of a plan to temper record inflation, but investors fear the Fed could slow economic growth too much and trigger a recession.
Last week, the Fed raised its key short-term interest rate to triple the usual amount for its biggest increase since 1994. It has also just started allowing some of the trillions of dollars worth of bonds it has purchased during the pandemic to exit its balance sheet. . This should put upward pressure on longer-term interest rates and is another way for central banks to withdraw previously buoyant supports under the markets to support the economy.
The Fed’s moves come as some discouraging signals have emerged about the economy, including lower spending at retailers and gloomy consumer sentiment. This has raised concerns that the Fed’s actions may be too aggressive.
Investors will be listening closely for clues about the Fed’s plans for possible additional rate hikes when Chairman Jerome Powell speaks before congressional committees this week.