- US equities climbed Tuesday as a tech-led rebound ended the S&P 500’s four-day losing streak.
- Mega-cap companies including Apple,Facebook, and Amazon pushed indexes higher as investors turned back to the recently sold-off growth favourites.
- Still, new measures to curb the coronavirus’s spread in the UK revived fears of fresh lockdowns and another wave of infections.
- House testimony from Jerome Powell highlighted progress made in the US economic recovery but reiterated that “great uncertainty” still surrounds the bounce-back.
- Oil gained, with West Texas Intermediate crude rising as much as 1.8%, to $US40.02 per barrel.
- Watch major indexes update live here.
US stocks climbed on Tuesday as rebounding tech giants offset renewed coronavirus fears and concerns of a slowing economic recovery.
The rally ended the S&P 500’s four-day losing streak and placed stocks on steadier footing as volatility fell through the day. Major indexes had been falling in recent sessions in choppy trading as investors ditched high-valued tech stocks and lost hope for a near-term stimulus deal.
Here’s where US indexes stood at the 4 p.m. ET market close on Tuesday:
- S&P 500:3,315.57, up 1.1%
- Dow Jones industrial average: 27,288.18, up 0.5% (140 points)
- Nasdaq composite:10,963.64, up 1.7%
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The tech sector’s gains helped erase premarket declines that came after UK Prime Minister Boris Johnson revealed new measures to curb the coronavirus’s spread after fresh outbreaks around the nation. Policies including earlier bar and restaurant closures and encouraging working from home are set to stay in place for at least six months. New COVID case counts abroad have reignited fears that another wave of infections could emerge in the US.
In all, consumer cyclical and communications stocks outpaced surging tech names. Energy and financial stocks continued their underperformance.
Tesla sank on Tuesday after CEO Elon Musk tweeted that innovations revealed at its “Battery Day” event may not reach “serious high-volume production” until 2022. The Tuesday event has long been viewed by shareholders as the next driver for strong gains.
GameStop rocketed higher after Chewy.com co-founder Ryan Cohen has taken a 10% stake in the gaming retailer. Cohen plans to revamp the business and have it compete with Amazon through faster shipping and a wider range of merchandise, according to a Bloomberg report.
Carvana gained after the company guided for record third-quarter revenue. Goldman Sachs upgraded shares to “buy” on the news and lifted its price target to $US205 per share.
Investors looked to morning House testimony from Federal Reserve Chairman Jerome Powell for updates to the US economic recovery. Powell praised the nation’s “marked improvement” from the second quarter from the housing market’s rebound and strong consumer spending trends.
Still, the chairman warned of “great uncertainty” clouding the rebound’s path. He also reiterated that additional fiscal spending is likely necessary to lift areas of the economy where monetary policy is less effective, such as businesses unwilling to take out new loans.
Elsewhere, Chicago Fed President Charles Evans surprised market participants by suggesting interest rates could be raised before the central bank’s new inflation target is reached. The statement fuelled new speculation around the Fed’s already loose forward guidance, and left some worried for premature rate hikes. Evans’ comments pushed the dollar higher through the session.
Gold sank hovered around $US1,900 per ounce in the afternoon as the dollar gained. The precious metal had been trading between $US1,900 and $US2,000 before breaking through the lower threshold on Monday.
Oil prices gained but failed to fully retrace Monday’s slump.West Texas Intermediate crude rose as much as 1.8%, to $US40.02 per barrel. Brent crude, oil’s international standard, gained 1.8%, to $US42.20 per barrel, at intraday highs.
Tuesday’s gains come after fresh pandemic concerns and allegations of money laundering at major banks dragged the Dow into a 510-point loss on Monday. Healthcare shares also tumbled in the prior session as the death of Justice Ruth Bader Ginsburg sparked fears the Affordable Care Act being reversed in the Supreme Court.
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