Stocks closed broadly higher Wednesday on Wall Street, clawing back all of its losses from a day earlier and extending its strong gains for the week.
The S&P 500 rose 1.7% as the market bounced back from a sudden drop Tuesday that snapped the index's three-day winning streak. Crude oil prices posted their fifth straight gain.
Technology, the only sector that's holding on to a gain for the year, accounted for much of the market's upward move.
Communication services companies and banks also helped drive the market higher.
Major stock indexes in Europe and Asia also finished higher. Bond yields moved broadly lower, a sign of caution in the market.
Fresh hope about a potential vaccine for COVID-19 and optimism that the U.S. economic will recover in the second half of the year as businesses gradually reopen and stay-at-home orders aimed at stemming the spread of the coronavirus are relaxed have spurred stocks higher this week.
“Although this is optimism, this is very cautious optimism,” said J.J. Kinahan, chief strategist with TD Ameritrade. “You're seeing people also buy bonds today. That's very surprising seeing the stock market doing well and also seeing people buy bonds.”
With the gains so far this week, the S&P 500 has recouped its losses from last week and is on track for its best weekly gain since early April. The index is still down about 12% from its all-time high in February, however.
Investors are betting that the economy and corporate profits will begin to recover as the U.S. and countries around the world slowly open up again. However, concerns remain that as more people venture out it could lead to another surge in infections, potentially ushering in another wave of shutdowns.
“What it all comes down to is consumer spending,” said Scott Wren, senior global market strategist at Wells Fargo Investment Institute. “If we're all still sitting home in September or October, the market is going to go lower.”
At a glance
• The S&P 500 gained 48.67 points to 2,971.61
• The Dow Jones Industrial Average rose 369.04 points, or 1.5%, to 24,575.90
• The Nasdaq composite, which is heavily weighted with technology stocks, climbed 190.67 points, or 2.1%, to 9,375.98
• The Russell 2000 index was up 39.21 points, or 3%, to 1,346.93 in another bullish signal with small-company stocks leading the rest of the market