NEW YORK — Shares ended higher on Wall Street on Tuesday, regaining some of the ground they lost last week in their worst weekly decline since the start of the pandemic. the S&P500 rose 2.4%. It is still 21.5% lower than the January record. The tech-heavy Nasdaq climbed 2.5% and the Dow Jones Industrial Average rose 2.1%. Markets will watch closely Congressional testimony from Federal Reserve Chairman Jerome Powell this week for more clues about the Fed’s thinking about inflation and future rate hikes. The yield on the 10-year Treasury rose to 3.30%.
THIS IS A BREAKING NEWS UPDATE. Following is AP’s earlier story.
NEW YORK (AP) — Stocks rose wide on Wall Street on Tuesday, regaining some of the ground they lost in their worst weekly decline since the start of the pandemic.
the S&P 500 was up 2.7% as of 3:25 PM Eastern, on pace to make up for just under half of the benchmark index’s losses last week. The Dow Jones Industrial Average rose 694 points, or 2.3%, to 30,585 points and the Nasdaq rose 2.8%.
Technology stocks made some of the strongest gains. Apple rose 3.4% and Microsoft rose 2.5%.
Retailers, healthcare companies and banks also made solid profits. Kellogg rose 2.3% after the maker of Frosted Flakes and Rice Krispies said it would be split into three companies. Spirit Airlines rose 8% after JetBlue sweetened its buyout offer for the budget airline.
European markets closed mostly higher, while Asian markets closed mixed overnight. The 10-year Treasury yield rose to 3.30% from 3.23% at the end of Friday. The markets were closed Monday for Juneteenth’s observation.
About 90% of the stocks within the S&P 500 gained ground. However, the index remains mired in a slump, along with every other major index, and is still about 21% lower than the record reached in January. It has posted a weekly loss in 10 of the last 11 weeks.
Stocks are generally sliding as investors adjust to higher interest rates that the Federal Reserve and other central banks are increasingly dishing out. The aggressive rate hikes are part of a plan to dampen record high inflation, but investors are concerned that the Fed risks slowing economic growth too much and triggering a recession.
Inflation and interest rate concerns have been exacerbated by a spike in energy prices following Russia’s invasion of Ukraine. The price of US crude rose 1% on Tuesday to $110.65 a barrel. It is up about 52% for the year. That has taken a bigger bite out of people’s wallets at the gas station and is leading to a slowdown in spending elsewhere.
The ongoing list of concerns has made for an extremely turbulent market. Daily swings between gains and losses are common and major indices have sometimes shifted between sharp gains and losses on an hourly basis.
“In these kinds of markets, you just get more volatility in both directions,” said Ross Mayfield, investment strategist at Baird. “The whole market is made up of the Fed and inflation numbers.”
Last week, the Fed raised its key short-term interest rate three times the usual amount for its biggest hike since 1994. It has also just begun allowing some of the trillions of dollars in bonds it bought during the pandemic to move off its balance sheet. to roll off. That should put upward pressure on longer-term interest rates and is another way central banks are pulling away support previously propped up under the markets to strengthen the economy.
The Fed’s moves are coming amid discouraging signs about the economy, including falling retail spending and sour consumer confidence. The National Association of Realtors reported Tuesday that sales of previously occupied U.S. homes have slowed for the fourth straight month. The housing market, a critical part of the economy, is slowing as home buyers face record high prices and sharply higher home financing costs than a year ago due to a rapid rise in mortgage rates.
Investors will listen closely for clues about the Fed’s plans for possible additional rate hikes when Chairman Jerome Powell speaks before congressional committees this week. The central bank could consider another such mega-rise at its next meeting in July, but Powell has said three-quarters-point increases wouldn’t be common.
Veiga reported from Los Angeles.