- US equities climbed on Tuesday as positive data releases fueled new hopes for a swift economic recovery.
- New home sales leaped by 16.6% in May to a seasonally adjusted annualized pace of 676,000, besting economists' estimate of 640,000.
- IHS Markit's index of US purchasing managers rose to 46.8 in June from 37 in May, signaling stabilization throughout the virus-battered economy.
- Futures for major indexes tumbled on Monday evening after the White House trade adviser Peter Navarro told Fox News the US-China agreement was "over." Navarro walked back the comments, and stocks opened higher.
- Oil erased early gains, with West Texas Intermediate crude sliding as much as 1.7%, to $39.76.
- Watch major indexes update live here.
US stocks rallied on Tuesday as positive economic-data releases fueled fresh investor optimism.
The Census Bureau said new home sales leaped by 16.6% in May to a seasonally adjusted annualized pace of 676,000. Economists surveyed by Bloomberg had expected a pace of 640,000.
Record-low interest rates and recovering consumer confidence should keep the optimistic housing-market trend alive for months to come, Ian Shepherdson, the chief economist at Pantheon Macroeconomics, said on Tuesday.
"Looking ahead, the complete recovery — and more — in mortgage applications suggests that both new and existing home sales are set to rise very strongly over the next few months," he said.
Here's where US indexes stood after the 4 p.m. ET market close on Tuesday:
- S&P 500: 3,131.29, up 0.4%
- Dow Jones industrial average: 26,156.10, up 0.5% (131 points)
- Nasdaq composite: 10,131.37, up 0.7%
Investors hoping for a smooth economic recovery got a welcome reading on Tuesday morning from IHS Markit's index of purchasing managers. The metric rose to 46.8 in June from 37 in May. Though it's the index's highest level since March, it still sits just below the threshold of 50 that indicates whether an economy is growing or shrinking.
Surging tech names led indexes higher and pushed the
Bank stocks closely followed the tech rally, with JPMorgan, Bank of America, and Citigroup all climbing.
Wirecard shares spiked as much as 45% following reports that former CEO Markus Braun was arrested on suspicion of false accounting. The German fintech company slid 56% at intraday lows on Monday after saying that $2 billion worth of missing cash likely didn't exist.
Futures contracts for major indexes slid on Monday evening after the White House trade adviser Peter Navarro told Fox News the US's trade agreement with China was "over." He cited "the lack of trust we now have in the Chinese Communist Party" and blamed the country for the coronavirus pandemic. Dow futures tanked roughly 400 points following Navarro's interview.
The trade adviser quickly walked back his comments, saying they were taken "wildly out of context" and "had nothing at all to do with the phase-one trade deal." President Donald Trump said in a tweet late Monday that the agreement was "fully intact." The comments helped erase futures-market losses, and the gains carried over into regular trading.
Oil erased gains after rising by about 2% in early trading. West Texas Intermediate crude slid as much as 1.7%, to $39.76. Brent crude, the international benchmark, fell 2%, to $42.21, at intraday lows.
Tuesday's upswing followed a less impactful session to start the week. The Dow rose 154 points on Monday as investors turned their focus to economic-reopening progress from risks of another surge in COVID-19 infections.
The popular stay-at-home plays Netflix, Zoom, and Peloton all hit record highs on Monday as investors viewed rising coronavirus case counts as a harbinger of longer lockdowns. Gold reached its highest level in nearly eight years.
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