US stocks surged Tuesday as Wall Street built on momentum in a broad market rally that began in the previous trading session.
The benchmark S&P 500 rose 2.9%, putting the index on track for its biggest two-day gain since March 2020 and its strongest daily breadth since late 2018, according to data from Bespoke Investment Group. The Dow Jones Industrial Average jumped 750 points, or 2.5%, to above 30,000 and the tech-heavy Nasdaq Composite rose 3.2%.
All eyes were on Elon Musk’s charade with Twitter (TWTR) on Tuesday after Bloomberg reported that the CEO of Tesla (TSLA) had agreed to proceed with his $44 billion deal to buy the social media platform. Musk confidentially filed a letter in the Delaware Chancery Court Monday night to proceed with the acquisition, days before it was scheduled to be dismissed as part of Twitter’s lawsuit. Shares in Twitter are up nearly 13% in afternoon trade, while shares in Tesla are down as much as 6%.
As stocks rallied, investors cheered a new jobs reading that showed US job vacancies fell by the most in nearly two and a half years in August – a welcome sign for Federal Reserve officials trying to curb outsized demand for jobs Workers fighting to curb inflation. The Labor Department said in its monthly Job Vacancy and Labor Turnover Survey (JOLTS) that job vacancies fell 1.1 million to 10.1 million on the last working day in August.
Bonds rallied along with equities on Tuesday, with government bond yields falling for the second straight day. The benchmark 10-year US bond fell to around 3.6% after beating a 2008 high of 4% last week. The US Dollar Index also fell lower.
After an ugly September for the major averages, equity markets started the month on a high note on Monday. During the previous session, the S&P 500 rose 2.6% on its best day since July, the Dow rose 2.7%, marking its biggest daily gain since June, and the tech-heavy Nasdaq Composite rose 2.3%.
DataTrek Research’s Nicholas Colas points out that the S&P 500 rarely rises more than 2% in non-stressed market conditions, suggesting Monday’s rebound was a sign of “fragility, not strength.” For example, between 2013 and 2019 there were fewer than four such days each year, compared to 14 in 2022.
“History strongly suggests that Monday’s 2.6 percent S&P rally is neither healthy nor a sign that the index has bottomed,” said Cola, adding that the reduction in outsized volatility, as we have seen this year, requires a change in policy makers. “Markets have been trying to predict a turning point for Fed policy for months, with little success amid continued strength in US labor markets and still high inflation.”
A measure of U.S. manufacturing from the Institute for Supply Management (ISM) on Monday showed activity slipped to the lowest since May 2020 — a decline that fueled some optimism about a dovish move by the Federal Reserve. And adding to hopes that central bankers could roll back aggressive monetary policy interventions was a warning from a United Nations agency that policymakers could usher in a global recession and a period of prolonged stagnation if they continue aggressively raising interest rates.
“Excessive monetary tightening could usher in a period of stagnation and economic instability,” the United Nations Conference on Trade and Development (UNCTAD) said in a statement.
On the company side, shares of Rivian (RIVN) rose more than 11% after the company reiterated that it is still on track to produce 25,000 electric vehicles this year, confirming its previous forecast.
Poshmark (POSH) shares rose 13% after it was announced that the second-hand fashion retailer has been acquired by South Korean internet giant Naver Corp in a $1.2 billion deal. should be taken over.
Oil also extended Monday’s gains after an OPEC+ report considered a sharp production cut. West Texas Intermediate (WTI) and Brent crude oil futures were each up more than 3% to $86.44 and $91.86 a barrel, respectively.
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
Click here for the latest stock tickers from the Yahoo Finance platform
For the latest stock market news and in-depth analysis, including events moving stocks, click here
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance App for Apple or Android
Follow Yahoo Finance on Twitter, Facebook, Instagram, flipboard, LinkedInand youtube