- US stocks surged Tuesday as investors cheered a record jump in monthly retail sales and reports the Trump administration is preparing a $1 trillion infrastructure proposal.
- Domestic retail sales rebounded 17.7% in May, a record increase that more than doubled economist estimates.
- Tuesday’s climb extends gains from the final hours of trading on Monday that came after the Federal Reserve announced it would begin individual corporate bond purchases.
- The so-called reopening trade also surged Tuesday, with airlines and cruise lines gaining.
US stocks traded sharply higher Tuesday on data showing US retail sales surged a record 17.7% in May. The figure was more than double what economists expected, and offers a positive sign that the US economy may be on pace for a strong rebound from coronavirus.
Investors were also encouraged by a Bloomberg report saying President Donald Trump’s administration is readying a $1 trillion infrastructure proposal. Tuesday’s climb extends gains from the final hours of trading on Monday that came after the Federal Reserve announced it would begin individual corporate bond purchases.
President Donald Trump cheered the results on Twitter, saying “looks like a big day for the stock market, and jobs!”
Here’s where US indexes stood at 11:20 a.m. ET on Tuesday:
- S&P 500: 3,116.84, up 1.6%
- Dow Jones industrial average: 26,226.92, up 1.8% (463 points)
- Nasdaq composite: 9,874.56, up 1.5%
“This is another indicator that a V-shaped recovery could be more likely than we initially thought,” said Mike Loewengart, managing director of investment strategy at E*Trade. “That said, there is a lot hinging on the hope that a second wave of infections stays at bay.”
Later in the day, stocks pared some of their early gains during Federal Reserve Chairman Jerome Powell’s semiannual testimony before Congress. Powell said that the central bank would adjust its purchasing of corporate bonds based on market conditions, so as not to “run through the bond market like an elephant.”
He also said there’s “significant uncertainty” about the economic recovery from the coronavirus pandemic shock, and said that small businesses, lower income, and minority Americans are at the most risk.
The so-called reopening trade also surged Tuesday, with shares of American Airlines, Norwegian Cruise Line, and Carnival gaining in the early going. Retailers also gained, with shares of Gap, Macy’s and Foot Locker surging.
Oil futures followed equity markets higher. West Texas Intermediate crude jumped as much as 4.3%, to $38.71 per barrel. International standard Brent crude climbed 3.9%, to $41.27 per barrel, at intraday highs.