NEW YORK: Wall Street’s major indexes jumped on Tuesday as investors scooped up shares of megacap growth and energy companies hammered last week on worries over a global economic downturn. All 11 major S&P 500 sectors gained, as stocks rebounded broadly after the benchmark index last week logged its biggest weekly percentage decline since March 2020.
Investors are trying to assess how far stocks can fall as they weigh risks to the economy with the Federal Reserve taking aggressive measures to try to tamp down surging inflation. The S&P 500 is down over 20% this year after confirming it was in a bear market earlier this month.
“Do I think we have hit bottom? No. I think we are going to see more volatility, I think the bottoming process will likely take some time,” said Kristina Hooper, chief global market strategist at Invesco. “But I do think it is a good sign to see investor interest.”
The Dow Jones Industrial Average rose 585.65 points, or 1.96%, to 30,474.43, the S&P 500 gained 89.9 points, or 2.45%, at 3,764.74 and the Nasdaq Composite added 301.06 points, or 2.79%, at 11,099.41.
The energy sector, the top-gaining S&P 500 sector this year, surged over 5% after tumbling last week.
Megacap stocks Apple Inc, Tesla Inc and Microsoft Corp all rose solidly to give the biggest individual boosts to the S&P 500.
The Fed last week approved its largest interest rate increase in more than a quarter of a century to stem a surge in inflation.
Investors are pivoting to Fed Chair Jerome Powell’s testimony to the US Senate Banking Committee on Wednesday for clues on future interest rate hikes and his latest views on the economy.
Goldman Sachs now expects a 30% chance of the US economy tipping into recession over the next year, up from its previous forecast of 15%.
In company news, Kellogg Co shares rose 3% after the breakfast cereal maker said it was splitting into three companies.
Spirit Airlines shares jumped 9% after JetBlue Airways said on Monday it sweetened its bid to convince the ultra-low cost carrier to accept its offer over rival Frontier Airlines’ proposal.
Advancing issues outnumbered decliners ones on the NYSE by a 3.95-to-1 ratio; on Nasdaq, a 3.00-to-1 ratio favored advancers. The S&P 500 posted 1 new 52-week highs and 32 new lows; the Nasdaq Composite recorded 36 new highs and 90 new lows.
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