Stocks rose broadly on Wall Street Tuesday, adding to the market’s solid gains from a day earlier as investors wager that the new variant of the COVID-19 virus won’t pose a big threat to the economy.
Stocks rose broadly on Wall Street Tuesday, adding to the market’s solid gains from a day earlier, as investors wager that the new variant of the COVID-19 virus won’t pose as big a threat to the economy as some initially feared.
The S&P 500 rose 2.1% for its biggest gain since March. Chipmakers like Nvidia and consumer-focused companies such as AutoZone posted outsize gains. The Nasdaq climbed 3% and the Dow Jones Industrials rose 1.4%.
The rebound this week comes after the market posted two losing weeks in a row, weighed down by concerns over the spread of the omicron variant of COVID-19, mixed data on the job market and lingering worries about inflation.
Wall Street regained its confidence following comments Monday from Dr. Anthony Fauci, the White House’s chief medical adviser, who said early indications suggested that omicron may be less dangerous than the delta variant. It will still take a few weeks to learn whether omicron is more contagious, causes more severe illness or evades immunity.
“While the official scientific results have yet to be released regarding the omicron variant, investors are buying back into stocks in anticipation of a milder conclusion,” said Sam Stovall, chief investment strategist at CFRA.
The S&P 500 rose 95.08 points to 4,686.75. Over the past two days, the benchmark index has recouped nearly all of the losses it racked up the past two weeks. It’s now up 24.8% this year.
The Dow gained 492.40 points to 35,719.43. The Nasdaq rose 461.76 to 15,686.92. Markets in Europe and Asia closed higher.
Technology stocks accounted for a big share of the gains as investors shifted their focus to sectors that are poised to benefit the most from solid economic growth but are considered riskier bets. Apple rose 3.5% and Microsoft rose 2.7%.
Intel rose 3.1% after saying it plans to take its Mobileye self-driving car unit public in 2022.
A broad range of retailers and other companies that rely on direct consumer spending also made solid gains. Amazon.com rose 2.8%, Starbucks gained 2.6% and General Motors rose 2.8%.
Financial stocks also helped lift the market, getting a boost from rising bond yields. Wells Fargo rose 3%.
Energy futures mostly rose, with the price of U.S. crude oil jumping 3.7% to $72.05 per barrel. That helped lift the S&P 500′s energy sector, which has already outpaced the 10 other sectors with a 50.7% gain so far this year.
Airlines and other companies in the travel sector initially rose, building on their gains from a strong rally on Monday, but ended lower following a late-day burst of selling. American Airlines slipped 0.2%, Delta Air Lines fell 0.3% and Royal Caribbean dropped 0.8%.
Smaller company stocks did better than the broader market in a sign that investors are confident about economic growth. The Russell 2000 gained 50.31 points, or 2.3%, to 2,253.79.
Bond yields rose. The yield on the 10-year Treasury rose to 1.48% from 1.43% late Monday. It had fallen to 1.34% on Friday as anxious investors sold stocks and piled into bonds.
“And now the reverse is true,” Stovall said. “Investors are leaving the safety of bonds because they think they heard the all-clear signal for stocks.”
Beyond any lingering uncertainty over omicron, Wall Street is looking ahead to next week, when the Federal Reserve is scheduled to hold a two-day meeting of policymakers that could offer an update on the central bank’s plans to tackle inflation. The Fed has said it plans to speed up the pace at which it trims its bond purchases, which have helped keep interest rates low. That has raised concerns that the Fed will raise its benchmark interest rates next year sooner than expected.