US stocks rallied in early trading on Monday and market the latest about-face for the market that has been hovering between gains and losses.
The S&P 500 rose 103.36 points or 2.88% to 3,686.43 as of 10:20 am Eastern time. Almost every stock in the benchmark index witnessed gains. The Dow Jones Industrial Average rose 618.03 points, or 2.1%, to 30,252.86. The Nasdaq rose 352.42 points or 3.42% to 10,673.96.
Technology and communications firms registered some of the biggest gains. Google’s parent company Alphabet surged by 3.9%.
Bond yields slipped from their multiyear highs and eased some pressure from the stocks. The yield on the 10-year Treasury, which help determine mortgage rates, slipped to 3.97% from 4.02% late Friday. The yield on the two-year Treasury, which tends to track expectations for future Federal Capital action, fell to 4.44% from 4.50% late Friday.
US government bonds surged after news that the country’s new Treasury chief was abandoning nearly all of a series of unfunded tax cuts announced last month that had disappointed markets.
Investors remained concerned about soaring inflation and the potential for a recession to hit the US and global economies. The key concern is the Fed’s aggressive policy to hike interest rates to curb inflation, which could go too far and slow the economy so much that it slips into a recession.
Wall Street will keep a close eye on the latest round of corporate financial reports. The quarterly results and financial updates could help give investors a clearer picture of how companies and consumers have been dealing with inflation. Investors will also be watching closely for any statements from corporate leaders focusing on inflation’s potential direction and the estimated impact on business.
Bank of America rose 5.6% after reporting earnings that top forecasts.
Several big airlines, which could see some turbulence in their finances if inflation hits consumers’ travel spending, which releases their reports this week. United Airlines announced its results on Tuesday, followed by American Airlines on Thursday.
Investment bank Credit Suisse surged 4% after agreeing to pay $495 million as part of a settlement in a dispute with the US over mortgage-backed securities.