US stocks rose Tuesday as excitement over the economic reopening sent the S&P 500 to a record high.
The Dow Jones Industrial Average rose 300 points, or 0.8%. The S&P 500 gained 0.6%, bringing the benchmark close to its record. On Friday, the S&P 500 closed just 0.8% from an all-time high.
The Nasdaq Composite gained 0.5%.
The gains came as U.S. Covid cases continued to decline amid rising vaccination rates. According to CDC data released on Sunday, more than half of the US population has received at least one dose of a Covid vaccination. More than 62% of adults have received a leased dose, the CDC said. There were only 12,663 new cases on Saturday, the lowest since March 2020, according to the CDC.
Stocks linked to an economy reopening led the gains. Carnival Corp and Norwegian Cruise Line Holdings’ stakes each increased more than 2%. American Airlines and United Airlines also grew by around 2% each.
Boeing was up 3.2% after an analyst recommended investors cut short-term hurdles for the aircraft maker and buy the stock while it was still below its early 2020 level.
Energy stocks rose as US oil futures rose nearly 3% to over $ 68 a barrel. Exxon, Chevron, and Marathon Petroleum all rose.
Meme stock AMC Entertainment rose again after selling $ 230.5 million in new shares to an investor. Shares were up 14% after doubling last week.
The moves in overnight trading come after the blue chip Dow and S&P 500 rose 1.93% and 0.55% respectively in May, marking their fourth consecutive positive month. The small-cap Russell 2000 rose 0.11% in May, posting its eighth consecutive positive month – its longest monthly winning streak since 1995.
The Nasdaq was up 2.06% last week, its best weekly performance since April. However, the tech-heavy composite lost 1.53% in May, breaking a six-month winning streak.
The stock exchange was closed on Monday for Memorial Day.
A key inflation indicator – the core consumer spending index – rose 3.1% yoy in April, faster than the forecast increase of 2.9%. Government bond yields fell on Friday despite the unexpectedly high inflation data.
“Overall, given the market reaction to [Friday]In the PCE release, investors’ concerns about inflation may be exaggerated – or perhaps already priced in, “said Chris Hussey, managing director at Goldman Sachs, in a press release.
“There could be a consensus that the inflation we see today is ‘good’ inflation – the kind of price spike that comes with accelerated growth, not a monetary policy mistake,” Hussey said.
The investors are waiting for the 15.-16. June scheduled meeting of the Federal Reserve. What matters to the markets is whether the Fed starts to believe that inflation is higher than expected or that the economy will be strengthened enough to move forward without so much monetary support.
The May labor market report, due to be released on Friday, will provide an important overview of the economy. According to the Dow Jones, economists expect around 674,000 new jobs to be created in May after significantly fewer than expected 266,000 jobs were added in April.
Zoom Video Communications and Hewlett Packard Enterprise will release quarterly results on Tuesday after the bell.
– CNBC’s Patti Domm contributed to the coverage.
