Dow rallies more than 1,500 points in two days, S&P 500 posts best 2-day gain since 2020

Dow rallies more than 1,500 points in two days, S&P 500 posts best 2-day gain since 2020

Stocks surged Tuesday as Wall Street built on a sharp rally seen in the previous session and bond yields continued to fall.

The Dow Jones Industrial Average rose 825.43 points, or 2.8%, to 30,316.32. The S&P 500 added nearly 3.1% to close at 3,790.93, and the Nasdaq Composite was up 3.3% to end at 11,176.41.

Tuesday’s gains also put the S&P 500 up 5.7% for the week and marked its biggest two-day rally since March 2020.

Markets have had a strong start to the month, bringing a respite from the swift declines seen September and the prior quarter. On Monday, the Dow jumped about 765 points for its best day since June 24. The S&P 500 advanced about 2.6% in its biggest one-day since July 27, and the Nasdaq added 2.3%.

“After falling more than 9% in September and extending its year-to-date decline to nearly 25% as of Friday’s close, we think the S&P 500 was looking oversold,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “In addition, some of last week’s selling pressure may have been driven by quarter-end rebalancing, which has now ended.”

“With sentiment toward equities already very weak, periodic rebounds are to be expected,” he added. “But markets are likely to stay volatile in the near term, driven primarily by expectations around inflation and policy rates.”

Sentiment has improved these past two sessions as Treasury yields come off more-than 10-year highs. The 10-year Treasury yield traded at about 3.63% on Tuesday, down from more than 4% at one point last week. Earlier in the day, it broke below 3.6%.

Sentiment on Tuesday also got a boost as shares of Credit Suisse ended the day 12% higher. Earlier in the week there were concerns regarding the bank’s financial health. The bank told CNBC it would provide updates to its strategy alongside its third-quarter numbers.

In other notable stock moves, Twitter leapt 22% after Elon Musk changed course and agreed to purchase the social media giant for the price of $54.20 a share

Stocks extended their advance following job openings data pointing to a weakening in the labor market, leading some traders to bet the Fed could back off its aggressive tightening campaign sooner than expected.

Still, the current bounce is “nothing different from the rally we had this summer,” Holly Newman Kroft, senior wealth advisor at Neuberger Berman, said on CNBC’s “Closing Bell” Tuesday.

“People like to hang onto good news but… we’re not going to have a recovery in this market until the Fed signals that they’re going to stop raising rates, and that’s not going to happen until inflation starts coming down,” she said.