Wall Street rallied sharply on Tuesday after strong retail sales eased concerns about slowing economic growth in April, lifting stocks of Apple, Tesla and other Megacap growth.
Ten of the 11 major S&P sector indicators have advanced, with financial, materials, consumer considerations and technology all gaining more than 2%.
Investors were elated by data that U.S. retail sales rose 0.9% in April as supply improved and consumers bought motor vehicles amid frequent restaurants.
Recently, penalized shares of Microsoft Corp, Apple Inc, Tesla Inc and Amazon rose 2% to 5.1%, pushing the S&P 500 and Nasdaq higher.
Tuesday’s broad rally followed weeks of selling in the U.S. stock market, with the S&P 500 falling to its lowest level since March 2021 last week.
“Investors’ tendency to buy is to hit the biggest pockets of the stock. They are either in revision or carrying market territory,” said Sylvia Jablanski, chief investment officer at Defense ETF. “I think investors are looking at these opportunities to buy deep, and I suspect today is a good day to do it.”
The S&P 500 Bank Index jumped 3.8%, while Citigroup rose nearly 8% after Warren Buffett’s Berkshire Hathaway unveiled a $ 3 billion investment in a U.S. lender.
Another set of economic data showed that industrial production accelerated 1.1% last month, higher than the 0.5% estimate and 0.9% faster than the advance in March.
“This is consistent with continued economic growth in the second quarter and not a recession,” said Bill Adams, chief economist at Comerica Bank in Dallas.
Fed Chair Jerome Powell said at a news conference on Tuesday that the US Federal Reserve will continue to “push” to tighten US monetary policy until it is clear that inflation is declining.
Traders are setting prices in the 85% chance of a 50-basis point rate increase in June. The S&P 500 rose 2.02% to close at 4,088.85 points. The Nasdaq rose 2.76% to 11,984.52 points, while the Dow Jones Industrial Average rose 1.34% to 32,654.59 points.
Underscoring the recent volatility on Wall Street, the S&P 500 gained or lost 39% so far in 2022, up 2% or more per session, from all 24 times in 2021.
Walmart Inc. fell 11.4% while the retail giant cut its annual profit forecast, indicating an injury to its margins. This is the biggest one-day fall for Walmart stocks since 1987.
Retailers Costco, Target and Dollar Tree fell between 0.8% and 3.2%.
United Airlines Holdings Inc. rose 7.9% after Carrier lifted its current quarterly revenue forecast, boosting shares of Delta Air, American Airlines and Spirit Airlines.
The Ukraine conflict, rising inflation, the COVID-19 lockdown in China and the tightening of aggressive policies by central banks have marked a positive first-quarter earnings season.
The S&P 500 is still down about 14% in 2022, and the Nasdaq is down about 23%, with growth stocks hurting due to the decline.
US-listed Chinese stocks expect China to ease its crackdown on technology.
Progressive issues exceed the number reduced by a 2.92-to-1 ratio on the NYSE; On the Nasdaq, a 3.19-to-1 ratio favors progressives.
The S&P 500 posted a new 52-week high and 30 new lows; The Nasdaq Composite recorded 24 new highs and 126 new lows.
The volume on the US exchange was 12.0 billion shares, averaging 13.3 billion in the last 20 trading days.