By Yasin Ebrahim
Investing.com – Stocks climbed Tuesday, as growth stocks sidestepped growing expectations for the Federal Reserve to turn more aggressive on rate hikes, while meme-stocks including GameStop returned to rally mode.
The Dow Jones Industrial Average gained 0.7%, or 254 points, the S&P 500 rose 1.1%, the Nasdaq rose 1.9%.
Federal Reserve Bank of St. Louis President James Bullard stressed the need for the Fed to move faster and more aggressively on rate hikes to curb the pace of inflation.
The remarks arrived a day after Fed Chairman Jerome Powell said the central bank would be prepared to hike by more than 25 basis points at upcoming meetings to “ensure a return to price stability.”
Wall Street was quick to price in steeper hikes following Powell’s comments, with Goldman Sachs now forecasting a 50 basis point hike at the Fed’s May and June meetings.
Regional banks paired some of their recent losses helping the broader financials sector rise more than 1% as rising rates boost the net interest margin of banks.
SVB Financial (NASDAQ:SIVB), Wells Fargo (NYSE:WFC), and First Republic Bank (NYSE:FRC) led the move higher.
Growth sectors of the market including big tech didn’t waver under the pressure of the rising yields.
Meta Platforms (NASDAQ:FB) Amazon (NASDAQ:AMZN) Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), and Apple (NASDAQ:AAPL) ended the day in the green.
Chinese tech stocks were also in the ascendency, supported by a surge in Alibaba Group (NYSE:BABA) after the e-commerce announced boosted its share buyback program to a record $25 billion.
JD.com (NASDAQ:JD) and Pinduoduo (NASDAQ:PDD) also rose on Tuesday.
Tesla (NASDAQ:TSLA), meanwhile, jumped more than 7% after the electric vehicle maker officially opened its Gigafactory in Berlin. The move is expected to boost Tesla’s market share in Europe.
The opening of Giga Berlin “should further vault its [Tesla’s] market share within Europe over the coming years as more consumers aggressively head down the EV path,” Wedbush said in a note Monday.
On the earnings front, Nike (NYSE:NKE), a sizeable Dow Jones index component, rose more than 2% after reporting better-than-expected quarterly results.
“Recent results and commentary from senior leadership of the company show clearly that NKE is managing well various external headwinds, including ongoing supply chain distributions and geopolitical tensions, across the globe,” Oppenheimer said in a note. “We are optimistic that money will soon flow back into NKE shares.”
Energy stocks gave back some of their gains from a day earlier as oil prices turned negative on signs the European Union is unlikely to join the U.S. in banning Russian oil.
Tuesday also marked the return of retail investor appetite into the so-called meme stocks, with GameStop (NYSE:GME) surging 30%, AMC Entertainment (NYSE:AMC) up 15% and Express Inc (NYSE:EXPR) up nearly 10%.