Stocks rally as uncertainties keep Wall Street wobbly

NEW YORK — U.S. stocks rallied Tuesday as Treasury yields eased, but Wall Street remains wobbly as investors wait for more clarity on where interest rates, inflation and the economy are heading.

The S&P 500 climbed 39.25 points, or 1%, to 4,160.68 after reversing a morning loss of 1%. The Dow Jones Industrial Average rose 264.36 points, or 0.8%, to 33,180.14 after it also bounced between losses and gains throughout the day. The Nasdaq composite gained 113.86 points, or 0.9%, to 12,175.23.

Gains by Apple, Microsoft and other technology stocks were some of the biggest forces lifting the market. They benefited from a drop in Treasury yields, with the 10-year yield falling back below 3%. Lower yields in recent years have emboldened investors to pay higher prices for stocks, particularly companies that are growing quickly.

Stocks of energy producers also jumped as oil prices rose to roughly $120 per barrel, up more than 55% for the year so far. Exxon Mobil climbed 4.6%, and ConocoPhillips added 4.5%.

Kohl’s soared 9.5% after the department store chain said it’s in advanced talks to sell itself for about $8 billion to Vitamin Shoppe owner Franchise Group. Jam maker J.M. Smucker rose 5.7% after reporting stronger earnings than analysts expected.

Wall Street started the day pessimistic, and stocks initially fell after Target warned of lower profit margins as it slashes prices to clear out inventory. The retail giant sank 2.3% after it announced moves it said were needed to keep up with customers’ changing behaviors. Across the country, shoppers are spending more at restaurants and on travel than on sprucing up their homes as they did earlier in the pandemic.

Other retailers got caught in the downdraft, and Walmart fell 1.2%.

Worries were also stoked by the World Bank sharply cutting its forecast for economic growth this year. It pointed to Russia’s war against Ukraine and the prospect of widespread food shortages, raising the potential return of ” stagflation,” a toxic mix of high inflation and sluggish growth unseen for more than four decades.

The economy’s fragility has been atop Wall Street’s mind this year amid worries about interest-rate hikes coming from the Federal Reserve. The central bank is moving aggressively to stamp out the worst inflation in decades, but it risks choking off the economy if it moves too far or too quickly.