- The Dow surged on Tuesday in a relief rally following a selloff that pulled benchmarks from recent highs.
- Financial stocks were big winners as Treasury yields remain at elevated levels.
- Another vote in Washington related to the debt ceiling will be held on Wednesday.
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US stocks closed higher Tuesday, with the Dow Jones Industrial Average winning back deep losses suffered in the previous session’s sell-off, while federal lawmakers remain deadlocked over raising the debt ceiling.
The Dow soared over 300 points, nearly erasing the 323-point drop logged on Monday when rising yields also shoved the S&P 500 and the Nasdaq Composite from their most recent highs. Large-cap tech stocks tracked on the Nasdaq rose even as Treasury yields hovered at elevated levels. Facebook advanced after sliding by more than 5% on Monday in the wake of a whistleblower’s allegations about how the platform deals with hateful content.
Investors in recent sessions have been wrestling with fiscal uncertainty in Washington, implications from a surge in commodity prices, and inflation concerns that have led to the 10-year Treasury yield sticking around 1.5%. As banks tend to benefit from higher interest rates, financial stocks led gains among the S&P 500’s 11 sectors on Tuesday and Goldman Sachs was a standout winner also on the Dow.
Here’s where US indexes stood at 4:00 p.m. on Tuesday:
Tuesday’s gains came ahead of Wednesday’s vote in the Senate to end a filibuster on a bill passed in the House to suspend the debt ceiling through December 2022. The upcoming vote is a procedural step to let Democrats raise the debt ceiling without aid from the Republicans, Senate Majority Leader Chuck Schumer said Tuesday, according to CNN.
“We’re telling Republicans, ‘we’re not asking you to vote for it, just let us vote for it,'” Schumer was quoted as saying, and added: “The minority party can get out of the way and let the majority supply the votes.”
Around the markets, the Federal Reserve has called in the independent Office of Inspector General to determine whether financial trades made by top central bank officials may have broken ethics rules or the law.
Investors poured a net $68.7 million into bitcoin products in the week to October 1, the most since April, according to CoinShares.
Gold fell 0.7% to $1,757.76 per ounce.
Bitcoin rose 1.6% to $49,884.81 and topped $50,000 for the first time since early September.