Wall Street on Tuesday capped its best quarter since 1998 with more gains, a fitting end to a stunning three months for investors as the market screamed back toward its record heights after a big plunge.
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The S&P 500 climbed 1.5% Tuesday, bringing its gain for the quarter to nearly 20%. That rebound followed a 20% drop in the first three months of the year, the market's worst quarter since the 2008 financial crisis. The plunge came as the coronavirus pandemic ground the economy to a halt, causing millions of people to lose their jobs.
"It's the first time you've had back-to-back [quarters] like this since the 1930s," said Willie Delwiche, investment strategist at Baird. "It's pretty unprecedented."
The S&P 500 gained 47.05 points, to 3,100.29, on Tuesday. The Dow Jones Industrial Average rose 217.08 points, or 0.85%, to 25,812.88. It had briefly been down 120 points. The Nasdaq composite climbed 184.61 points, or 1.87%, to 10,058.77.
The S&P 500 has rallied back to within nearly 8.4% of its record set in February, after being down nearly 34% in late March. At one point last month, it had climbed as close as 4.5%.
The rebound for the market in the second quarter came as investors became increasingly hopeful that the economy could pull out of its severe, sudden recession relatively quickly. The hopes looked prescient after reports during the quarter showed that the job market swung back to growth and retail sales rebounded as governments relaxed lockdown orders meant to slow the spread of the coronavirus.
Stocks built on the gains made toward the tail end of the first quarter, when promises of huge amounts of aid from the Federal Reserve and Capitol Hill helped put a floor under the market. Low interest rates generally push investors toward stocks and away from the low payments made by bonds, and the Fed has pinned short-term interest rates at their record low of nearly zero.
But most of Wall Street says not to expect anything close to a repeat of the rocking second quarter. A rise in infections has several states pausing their lifting of restrictions. The surge in confirmed new cases, which has prompted the European Union to bar U.S. travelers from entry, is seeding doubts that the economic recovery can happen as quickly as had been forecast.
On Tuesday, Dr. Anthony Fauci, the nation's top infectious-disease expert, warned that the number of new infections reported daily could surge to 100,000 if Americans don't start following public health recommendations.
Technology, health care and financial companies powered much of the market's broad gains Tuesday. The buying accelerated after a report showed stronger-than-expected improvement in consumer confidence in June.
"Broadly speaking, the market is reacting to economic data that is better than expected," said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management.
Schutte said the market is being supported by the likelihood that there won't be another nationwide shutdown, by aggressive monetary policy and by hopes for a vaccine sooner rather than later. "The path of least resistance is still two steps forward, one step back," he said.
Meanwhile, the price for a barrel of U.S. crude oil slid 43 cents to settle at $39.27 Tuesday, but it's still nearly double where it was at the end of the first quarter.
The yield on the 10-year Treasury rose to 0.66% from 0.63% late Monday.
Information for this article was contributed by Yuri Kageyama of The Associated Press.
