Tuesday, March 22, 2022

DJIA:34,807.46, up 254.47
S&P 500: 4,511.61, up 50.43
Nasdaq: 14,108.82, up 270.36

Stocks rally; Treasuries extend rout

U.S. stocks finished higher on Tuesday, while a rotation out of bonds persisted as Wall Street mulled recent hawkish remarks from Federal (Fed) Reserve Chair Jerome Powell. The Dow added 254 points, while the S&P 500 gained 1.1%, with both benchmarks back within 6% of their most recent records notched in early January. The Nasdaq Composite jumped nearly 2%. Meanwhile a rout in Treasuries continued, with the yield on the 10-year note up eight basis points (0.08%) to 2.38%, its highest level since May 2019. On Monday, Powell said there may be a need for policymakers to move “expeditiously” towards a more neutral level of interest rates to combat elevated inflation.

Ten of 11 S&P 500 sectors closed in positive territory, with growth-related groups leading the advance. Tesla Inc. climbed 7.9%, propelling its market value back above $1 trillion as the electric vehicle maker officially opened its German production factory. Additionally, banks were among the standouts, helped by the jump in Treasury yields and positive analyst commentary. Earnings from Nike Inc. also offered a bright spot, with shares rising 2.2% following robust results that included commentary around normalizing supply chains. In other corporate news, Alibaba Group Holdings Ltd. rallied 11% after boosting its stock buyback plan.

In commodities, West Texas Intermediate crude dipped 0.3% to $111.76/barrel as some European Union members, including Germany, indicated they remain too dependent on energy from Russia to implement sanctions. On the economic data front, an update from the Richmond Fed showed manufacturing activity in the region improved more than anticipated in March.

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