Stocks rose sharply on Monday as key earnings reports eased some of investors’ fears and oversold tech names enjoyed a rebound rally.
The Dow Jones Industrial Average gained 550.99 points, or 1.86%, to close at 30,185.82. The S&P 500 jumped 2.65% to 3,677.95. The tech heavy Nasdaq Composite surged 3.43% for its best day since July, finishing at 10,675.80.
The move comes as stocks are near the lows of the year, and the S&P 500 has declined in four of the past five weeks. Big moves in both directions in recent weeks have fed a sense of uneasiness on Wall Street, though some believe the market is due for a rebound.
“The 200-week moving average is a serious floor of support until companies fully confess or a recession officially arrives, both of which could take several more months and lead to a technical rally in the short term,” Morgan Stanley’s Mike Wilson said in a note to clients.
The Nasdaq’s strong day was helped by some speculative tech names, with Zoom Video gaining 6% and Chinese internet stocks outperforming.
Meanwhile, the third-quarter earnings season is in full swing. Investors are monitoring if corporate America will have any significant downward revisions to their outlooks in the face of stubbornly high inflation and the economic slowdown.
Another factor in Monday’s moves were political developments in Europe, where new UK finance minister Jeremy Hunt announced that almost all planned tax cuts would be scrapped. The pound traded more than 1% higher at almost $1.135 per U.S. dollar, and U.K. government debt rallied sharply.