S&P, Dow, Nasdaq move higher after rough start to week; yields dip

Wall Street sign post in front of Stock Exchange building in New York, USA


Wall Street major indices gained on Tuesday amid a lack of major catalysts, picking up after a rough start to the week as investors looked past concerns over COVID resurgence in China.

The Dow (DJI) climbed 0.76%, the S&P 500 (SP500) gained 0.63% and the Nasdaq Composite (COMP.IND) edged 0.39% higher.

The 10-year Treasury yield (US10Y) is down 4 bps at 3.79%, while the 2-year yield (US2Y) is down 2 bp at 4.53%.

Of the 11 S&P 500 sectors, 10 were higher, led by a recovery in energy stocks as oil prices inched higher. The only exception was the real estate sector.

Meanwhile, Cleveland Federal Reserve President Loretta Mester told CNBC that inflation needs to show more signs of progress before she can stop advocating for rate hikes. But she noted that recent data has been encouraging.

“Yesterday’s Fed speakers hinted at a slower pace of continued rate hikes,” UBS’ Paul Donovan wrote. “Fed Chair Powell may be kicking the prostrate form of the economy more gently, but the obsessive chant of ‘hike, hike, hike’ means Powell is still kicking.”

The economic calendar is light again, but Wednesday will have more data to digest – durable goods, new home sales and the much-awaited FOMC minutes.

Among active stocks, Best Buy soared 10% after topping estimates and improving its holiday sales guide, while Dollar Tree tumbled 10% as its guidance indicated elevated inflationary pressure.