U.S. stocks finally seemed to find a footing on Tuesday after a rocky start to the year, with tech stocks leading the rally as investors somewhat felt reveled after there were no major surprises during Fed Chair Jerome Powell’s testimony to Congress. All the three major indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) added 0.5% or 183.15 points to close at 36,252.02.
The S&P 500 gained 0.9% or 42.78 points to end at 4,713.07 points, snapping its five-day losing streak. The rally was led by energy and tech stocks.
The Energy Select Sector SPDR (XLE (NYSE:XLE)) advanced 3.4%, while the Technology Select Sector SPDR (XLK) added 1.2%. Eight of the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq rose 1.4% or 210.62 points to finish at 15,153.45 points, snapping its four-day losing streak. Nasdaq’s jump from a 2.7% slide is also its best intraday reversal since Feb 28, 2020.
Shares of Apple, Inc. AAPL and Meta Platforms, Inc. FB gained 1.7% and 1.9%, respectively. Apple has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The fear-gauge CBOE Volatility Index (VIX) was down 5.51 % to 11.67. Advancers outnumbered decliners on the NYSE by a 3.05-to-1 ratio. On Nasdaq, a 2.23-to-1 ratio favored advancing issues.
Investors Relived after Powell’s Testimony
After a rocky start to the year, stocks finally seemed to be back on track on Wednesday, with all the three major indexes bouncing back from their recent lows. On Wednesday, investors digested Fed Chair Jerome Powell’s testimony in front of the Senate Banking Committee that pointed as his likely nomination for a second term.
The testimony didn’t include any major surprises. Instead, investors breathed a sigh of relief after Powell said that the central bank is focused on ensuring that inflation doesn’t become “entrenched”. He also assured that the Fed would be careful about the economy as it moves forward to gradually remove the stimulus measures and go for rate hikes.
Rising interest rates have been worrying investors that have been taking a toll on stocks lately. Experts believe that the Fed will go for at least four interest rate hikes this year, which have been worrying investors but Powell’s comments somewhat eased the tensions on Tuesday.
Investors also weighed speeches from regional fed presidents and are now waiting to asses the situation once the inflation data is released on Wednesday.
Tuesday’s rally was primarily led by energy and tech stocks. Shares of Exxon Mobil Corporation (NYSE:XOM) XOM jumped 4.25 as U.S. oil prices cross $80 per barrel.
Tech and other growth stocks have been taking a hit lately due to growing interest rates as their revenues and earnings generally grow faster than average. Powell’s speech helped ease the tension that sent the high-flying tech stocks on a rally on Tuesday.
No economic report was released on Tuesday.
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