The S&P 500 closed at an all-time high on Tuesday, rebounding from huge losses sparked by the coronavirus pandemic and breaking a previous record set in February.
The S&P 500 climbed 0.23 percent, surpassing its intraday high of 3,393.52, before beating its February record and closing at 3,389.78. The index had come close to a record-setting high for more than a week before breaking the record Tuesday, confirming the start of a new bull market.
Strong housing data and better-than-expected retail earnings served as a catalyst for the rebound.
Amazon shares rose more than 4 percent on Tuesday, while Netflix and Alphabet both gained at least 2 percent. Consumer discretionary spending, which was the index’s best-performing sector, rose 1.5 percent.
However, despite stronger-than-forecast quarterly results, Home Depot and Walmart capped the index’s gains on Tuesday by selling off.
Meanwhile, the Nasdaq Composite climbed 0.7 percent to a record-setting 11,210.84 while the Dow Jones Industrial Average fell .2 percent to 27,778.07.
After a record-setting February, the S&P 500 fell more than 30 percent in light of the pandemic’s economic fallout.
The index hit a low on March 23, but has since risen more than 54 percent. That growth has been driven by advances in Big Tech shares — Facebook is up more than 27 percent year to date and Alphabet has risen over 16 percent in that time period. Amazon is up 79 percent in 2020, Netflix is up 52 percent, and Apple and Microsoft are up 34.1 percent and 57.4 percent, respectively, this year.
The market’s renewed growth comes after a period of unprecedented fiscal and monetary stimulus after the Federal Reserve cut the overnight U.S. rate to zero in the early days of the pandemic and started an open-ended quantitative easing program. At the same time, lawmakers passed legislation giving trillions of dollars of employment assistance, direct payments and other assistance to Americans.
“Equity markets are reflecting the massive monetary and fiscal stimulus that has been injected over the past four months,” Shannon Saccocia, chief investment officer at Boston Private, told CNBC. “Couple that with a more robust economic recovery than what was expected at the depths of the crisis, and interest rates once again at zero, and the rationale to diversify away from risk assets is hard to pinpoint.”