Wall Street bounces back with widespread gains

Stocks finished broadly higher on Wall Street on Tuesday, clawing back some of the ground they lost in their worst weekly drop since the beginning of the pandemic.

The rally to start the holiday-shortened week came as investors look ahead to what Federal Reserve Chair Jerome H. Powell will tell Congress on Wednesday, the first of two days of testimony as part of the central bank’s semiannual monetary policy report.

Last week, the Fed raised its key short-term interest rate by the most since 1994.

The Standard & Poor’s 500 rose 2.4%, recouping about 40% of its losses last week. More than 85% of the stocks in the benchmark index gained ground. The Dow Jones industrial average rose 2.1% and the Nasdaq climbed 2.5%.

“This is a little more of an oversold bounce that the market is looking at and trying to figure out what is the path the Federal Reserve is actually going to navigate,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management.

Technology stocks had some of the strongest gains. Apple rose 3.3% and Microsoft rose 2.5%.

Retailers, healthcare companies and banks also made solid gains.

Kellogg rose 2% after the maker of Frosted Flakes and Rice Krispies said it would split into three companies. Spirit Airlines jumped 7.9% after JetBlue sweetened its buyout offer for the budget airline.

The yield on the 10-year Treasury rose to 3.30% from 3.23% late Friday. Markets were closed Monday for the observation of Juneteenth.

All told, the S&P 500 rose 89.95 points to 3,764.79. The index is still down 21.5% from the record high it set in January. The Dow rose 641.47 points to 30,530.25, while the Nasdaq advanced 270.95 points to 11,069.30.

Smaller-company stocks also gained ground. The Russell 2000 rose 28.34 points, or 1.8%, to 1,694.03.

The price of U.S. crude oil rose 1% to settle at $110.65 per barrel Tuesday. It’s up about 52% for the year.

The National Assn. of Realtors on Tuesday reported that sales of previously occupied U.S. homes slowed for the fourth consecutive month. The housing market is slowing as home buyers face record high prices and sharply higher home financing costs after a rapid rise in mortgage rates.