(Reuters) – U.S. stocks rose on Tuesday, led by a rebound in the technology sector, as Federal Reserve Chair Jerome Powell said the central bank would act “as appropriate” to trade war risks, leaving the door open for a possible rate cut.
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., June 3, 2019. REUTERS/Brendan McDermid
A day after St. Louis Fed chief James Bullard said a rate cut may be warranted soon, Powell said the Fed was “closely monitoring the implications” of a trade dispute that has disrupted global markets and posed risks to growth.
Wall Street’s main indexes have shed more than 6 percent in May on fears of a recession as trade tensions between the United States and China show little signs of easing.
“Investors are taking comfort in what appears to be a Fed that is contemplating on cutting rates if the economy materially slows down,” said Michael Geraghty, equity strategist at Cornerstone Capital Group in New York City.
Also helping sentiment was a Washington Post report that Republican lawmakers may vote to block new tariffs on Mexican goods threatened by President Donald Trump.
The technology sector rose 2.46%, as shares of high-profile companies – Amazon.com, Apple Inc, and Google-parent Alphabet Inc – bounced back from Monday’s selloff, which was triggered by fears of heightened scrutiny from antitrust regulators.
The tech-heavy Nasdaq confirmed correction territory on Monday, having lost 10.3% since its record closing high on May 3. The S&P 500 is 6% away from its all-time high hit on May 1.
At 11:24 a.m. ET the Dow Jones Industrial Average was up 412.29 points, or 1.66%, at 25,232.07, the S&P 500 was up 40.48 points, or 1.47%, at 2,784.93 and the Nasdaq Composite was up 135.40 points, or 1.85%, at 7,468.42.
Interest-rate sensitive financial stocks gained 2.19%, eyeing their biggest one-day rise in two-months, as U.S. Treasury yields extended gains.
Utilities and real estate, considered defensive sectors, lost more than 1% and were the only two among the 11 S&P sectors in the red.
Advancing issues outnumbered decliners by a 3.33-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 2.81-to-1 ratio on the Nasdaq.
The S&P index recorded 24 new 52-week highs and one new lows, while the Nasdaq recorded 30 new highs and 49 new lows.
Reporting by Medha Singh and Amy Caren Daniel; Additional reporting by Shreyashi Sanyal; Editing by Anil D’Silva