The S&P 500 rebounded Tuesday, recovering from the prior-day rout as bargain-seeking investors piled into beaten down cyclical stocks amid a rebound in U.S. bond yields.
The S&P 500 rose 1.7%, the Dow Jones Industrial Average gained 1.7%, or 584 points, the Nasdaq was up 1.8%.
The United States 10-Year yield rose above 1.2% after dropping to 1.14% earlier in the session, providing a much needed boost to financials, mostly bank stocks following Monday's selloff.
JPMorgan (NYSE:JPM), Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC) rose more than 2%.
The selloff on Monday was largely attributed to fears that a resurgence in Covid-19 infections would stall the recovery. Others, however, suggest the selloff was also likely driven by investor positioning.
"Although, with the economic recovery more than solid and nominal case numbers still extremely restrained, the drop-off is also likely a reflection of 'positional issues' in the market, as one news outlet described it," Stifel said.
But some on Wall Street suggest the economy has transitioned from a recovery stage to an expansion phase.
"The most visible signs of the transition have been the return of inflation-adjusted output in June to pre-pandemic levels; productivity-enhancing investment in high-tech equipment; broadening loan growth beyond consumers to businesses; and strong job gains as businesses gained renewed confidence," Wells Fargo (NYSE:WFC) said in a note.
Energy also recovered some of its losses from a day earlier, up more than 2% amid a tentative rebound in oil prices as the delta wave threatens demand.
"Our bottom-up estimate of the impact that a Delta wave could have on global demand instead points to a potential 1 million-barrel-a-day hit for only a couple months, and even less if vaccines prove effect at lowering hospitalizations in DMs, the origin of most summer demand improvements," Goldman Sachs said.
Energy was given an added boost from a 3% surge in Halliburton (NYSE:HAL) as the oil services company reported results that topped market expectations.
Technology stocks also benefited from dip-buying, with Apple (NASDAQ:AAPL), in the ascendency, up more than 2%
UBS lifted its price target on Apple to $166 from $155, after raising estimates on tech giant's revenue and EPS for the third quarter to $74.7 billion and $1.01 from $71.3 billion and 95 cents, respectively.
Microsoft (NASDAQ:MSFT, Facebook (NASDAQ:FB), Google-parent Alphabet (NASDAQ:GOOGL), and Amazon.com (NASDAQ:AMZN) were higher.
International Business Machines (NYSE:IBM) rose 2% after its second-quarter results topped analysts estimates.
"We’re encouraged by momentum around our wider hybrid cloud thesis," Credit Suisse (SIX:CSGN) said in a note as it raised its price target on IBM to $167 from $165.