Wall Street stocks regained their swagger after a down session to open the week, notching solid gains Tuesday following good Nike earnings and as markets monitored ongoing developments in Ukraine.
Following last week’s rally, equities retreated Monday on jitters over hawkish commentary from Federal Reserve Chair Jerome Powell, who signalled the likelihood of aggressive interest rate hikes.
The yield on the 10-year US Treasury note — a proxy for interest rate expectations — continued to push higher Tuesday.
But this time stocks advanced, opening modestly higher and picking up speed as the session wore on in a sign that last week’s bullish momentum remained intact.
“Nike is a pretty good bellwether for consumer stocks,” said Art Hogan, chief strategist at National Securities. “Yesterday was a bit of an overreaction.”
The Dow Jones Industrial Average finished up 0.7 per cent at 34,807.46.
The broad-based S&P 500 won 1.1 per cent to end at 4,511.61, while the tech-rich Nasdaq Composite Index jumped 2.0 per cent to 14,108.82.
Consumer discretionary stocks led the industrial sectors following results from Nike that topped analyst expectations.
The sporting giant rose 2.2 per cent as strong consumer demand and good product pricing offset a hit from lower China sales.
Meanwhile, in Ukraine, President Volodymyr Zelensky renewed his offer of direct talks with his Russian counterpart Vladimir Putin, while US President Joe Biden warned Russia that it will pay a “severe price” if it uses chemical or biological weapons in Ukraine.
“It seems whatever economic weakness that is starting to arise is being shrugged off as hope grows that Russia has lost momentum in the war in Ukraine,” Oanda’s Edward Moya said.
“The impact from this war is anyone’s guess, but what we do know is that the longer it lasts, the greater the stagflation risk will be for the global economy.”