Stocks rose on Tuesday as Wall Street built on a strong rally seen in the previous session and bond yields continued to fall.
The Dow Jones Industrial Average rose 825.43 points, or 2.8%, to 30,316.32. The S&P 500 rose nearly 3.1% to close at 3,790.93, and the Nasdaq Composite rose 3.3% to close at 11,176.41.
Tuesday’s gains also sent the S&P 500 up 5.7% for the week and marked its biggest two-day gain since March 2020.
The markets have had a good start to the month, providing a respite from the rapid declines of September and the previous quarter. On Monday, the Dow jumped about 765 points for its best day since June 24. The S&P 500 advanced about 2.6% in its biggest one-day gain since July 27, and the Nasdaq added 2.3%.
“After falling more than 9% in September and extending its annual decline to nearly 25% at Friday’s close, we believe the S&P 500 looked oversold,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “Furthermore, some of the selling pressure last week may have been driven by the end-of-quarter rebalancing, which has now ended.”
“With sentiment towards equities already very weak, periodic bounces should be expected,” he added. “But markets are likely to remain volatile in the short term, driven primarily by expectations about inflation and policy rates.”
Sentiment has improved over the past two sessions as Treasury yields eased from more than 10-year highs. The 10-year Treasury yield was trading around 3.63% on Tuesday, down from more than 4% last week. Earlier in the day, it broke below 3.6%.
Sentiment on Tuesday also rose as Credit Suisse shares ended the day up 12%. Earlier in the week there were concerns about the bank’s financial health. The bank told CNBC it will provide updates on its strategy alongside its third-quarter numbers.
In other notable stock moves, Twitter jumped 22% after Elon Musk reversed course and agreed to buy the social media giant for $54.20 a share.
Stocks extended their advance after jobs data pointed to a weakening labor market, prompting some traders to bet that the Fed could pull back its aggressive tightening campaign earlier than expected.
Still, the current bounce “is nothing different than the rally we had this summer,” Holly Newman Kroft, senior wealth adviser at Neuberger Berman, told CNBC’s “Closing Bell” on Tuesday.
“People like good news, but … we’re not going to have a recovery in this market until the Fed signals that it’s going to stop raising rates, and that won’t happen until inflation starts to come down,” he said. said
Read today’s market coverage in Spanish here.