Stocks gain ground, clawing back a piece of last week’s drop

NEW YORK (AP) — Stocks rose broadly on Wall Street Tuesday, clawing back some of the ground they lost in their worst weekly drop since the beginning of the pandemic.

The S&P 500 rose 2.4% as of 10:11 a.m. Eastern. The Dow Jones Industrial Average rose 508 points, or 1.7%, to 30,402 points and the Nasdaq jumped 2.9%.

Technology stocks had some of the strongest gains. Apple rose 3.6% and Microsoft rose 2.5%.

Retailers, health care companies and banks also made solid gains. Kellogg rose 2.1% after the maker of Frosted Flakes and Rice Krispies said it would split into three companies. Spirit Airlines rose 7.3% after JetBlue sweetened its buyout offer for the budget airline.

European markets were also higher and Asian markets closed mixed overnight. 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.

More than 90% of stocks within the benchmark S&P 500 index gained ground. The index is still stuck in a slump, though, along with every other major index, and is still down about 22% from the record high it set in January.

Stocks have been generally sliding as investors adjust to higher interest rates that the Federal Reserve and other central banks are increasingly doling out. The aggressive rate hikes are part of a plan to temper record-high inflation, but investors are worried that Fed risks slowing economic growth too much and bringing on a recession.

Last week, the Fed hiked its key short-term interest rate by triple the usual amount for its biggest increase since 1994. It has also just begun allowing some of the trillions of dollars of bonds it purchased through the pandemic to roll off its balance sheet. That should put upward pressure on longer-term interest rates and is another way central banks are yanking supports earlier propped underneath markets to bolster the economy.

The Fed’s moves are happening as some discouraging signals have emerged about the economy, including sagging spending at retailers and soured consumer sentiment. That has raised concerns the Fed’s actions could wind up being too aggressive.

Investors will be closely listening for clues about the Fed’s plans for possible additional rate hikes when Chair Jerome Powell speaks before congressional committees this week.

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