DJIA: 32,654.59, up 431.17
S&P 500: 4,088.85, up 80.84
Nasdaq: 11,984.52, up 321.73

Stocks hold gains, Treasuries slide

U.S. stocks finished higher on Tuesday as evidence of resilient consumer spending helped spur a perceived risk on tone. The Dow added 431 points, while the S&P 500 climbed 2%. The Nasdaq Composite rallied 2.8% amid strength in tech shares. Economic data was in focus, with retail sales advancing a solid 0.9% in April, while the prior month’s reading reflected a sharp upward revision.

Also aiding risk sentiment were positive updates out of China, including improving COVID-19 trends and the possibility of easing regulation on big tech shares. Across the pond, the eurozone’s first-quarter GDP (Gross Domestic Product) figure came in better than anticipated. In other data, U.S. industrial production rose a stronger-than-projected 1.1% in April, though a measure of homebuilder sentiment fell to the lowest level since June 2020 this month.

Treasuries weakened, with the two-year note yield spiking 13 basis points (0.13%) to 2.70% on hawkish remarks from Federal Reserve (Fed) Chair Jerome Powell. The Fed chief reaffirmed expectations for a series of 0.50% rate hikes in the coming months, but also stated that the central bank “won’t hesitate” to tighten policy into restrictive territory, if necessary, in order to tame inflation.

In earnings, Walmart Inc. slumped 11.4% after its profit tally fell well below analyst expectations as the big-box retailer grappled with higher costs and supply chain issues. Elsewhere, Take-Two Interactive Software Inc. surged 11.8% as a bottom line beat and positive analyst commentary overshadowed tepid guidance from the video game maker. In other corporate news, shares of both Paramount Global and Citigroup Inc. jumped after Berkshire Hathaway Inc. disclosed significant stakes in the two companies.

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