Stocks rose in another session on Tuesday, as investors evaluated new data for further clues about sliding yields and the health of the U.S. economy.
The Dow Jones industrial average closed up 337.12 points, or about 1.1%, at 31,836.74. The S&P 500 advanced 1.6% to close at 3,859.11. The Nasdaq composite rose 2.2% to end at 11,199.12.
Tuesday’s moves added to the sharp rallies seen in the previous two sessions. On Monday, the Dow and S&P 500 each gained more than 1%, while the Nasdaq advanced 0.9%. On Friday, the Dow rose more than 700 points.
A A decline in bond yields contributed to recent gains. The yield on the benchmark 10-year Treasury note was last down 15 basis points at 4.087%. The 2-year Treasury yield last fell 3 basis points to 4.473%.
Taken together, the yield and major index moves are signs that investors are “doubling down on expectations of an easy Fed,” said Cliff Hodge, chief investment officer at Cornerstone Wealth.
Hodge said Tuesday’s economic data was a point of hope for investors looking for the Federal Reserve to reverse its course of interest rate hikes as the central bank tries to curb inflation.
The S&P CoreLogic Case-Shiller 20-City House Price Index released Tuesday showed. House prices fell 1.3% of the 20 major cities were surveyed monthly in August, but that was 13.1% higher than a year ago. Consumer Confidence Index also fellTwo months later the outlook for the economy improved.
“It’s a rainbow after a big storm,” Paul Zemsky, chief investment officer of multi-asset strategies and solutions at Voya Investment Management, said on Tuesday of bond moves and inflation data. “We’re seeing enough slack in the economy that we don’t have to worry about the Fed actually raising rates beyond what it’s already priced in.”
“I think we’re finally getting to a point where the market has priced in the right level of Fed tightening,” he added. “Once you do that, the uncertainty in the market decreases and you see higher prices.”
On top of that, traders saw a smattering of corporate reports. General Motors and Coca-Cola rose 3.6% and 2.4%, respectively. Xerox fell 14% after earnings per share came in less than half of expectations.
So far this season, companies have proven that they can perform better than expected. FactSet data showed that as of Tuesday morning, 71% of companies had topped analyst expectations for earnings per share.
Wall Street keeps its eye on Big Tech’s quarterly earnings. Alphabet and Microsoft will release the results after the bell on Tuesday. Meta Platforms, Amazon and Apple followed later in the week. Given their sheer size and market capitalization, any moves will move the market forward.
Correction: An earlier version of this article misstated Microsoft’s earnings date.