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May 23, 2022, 4:44 p.m. EDT

Dow scores best day in almost three weeks, S&P 500 pulls away from bear-market territory

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By Vivien Lou Chen and William Watts

U.S. stocks finished higher on Monday, bouncing back from the longest stretch of weekly losses for the Dow Jones Industrial Average since 1932 and a temporary dip by the S&P 500 into bear-market territory last week.

The Dow finished up by 618 points. Some analysts credited Monday’s gains to comments made by President Joe Biden about the prospect of reducing tariffs on China.

How did stocks trade?

  • The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.27% finished up 618.34 points, or 2%, at 31,880.24. Those were the largest daily gains since May 4, according to Dow Jones Market Data.

  • The S&P 500 /zigman2/quotes/210599714/realtime SPX -0.38% ended 72.39 points higher, or 1.9%, at 3,973.75.

  • The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -1.29% closed up 180.66 points, or 1.6%, at 11,535.27.

  • Those were the biggest gains for the S&P 500 and Nasdaq since May 17.

On Friday, the Dow Jones Industrial Average saw its eighth straight weekly decline, marking its longest losing streak since April 1932, according to Dow Jones Market Data. The S&P 500 and Nasdaq Composite each suffered seven straight weekly losses, their longest losing stretches since March 2001.

What drove the markets?

Investors appeared ready to buy a market beaten down by weeks of selling. That was despite reports of surging COVID cases in Beijing , where officials extended an order for students and workers to stay home and will carry out more mass testing in the nation’s second-largest city.

Need to Know: The stock market is ‘vulnerable to good news’ and a 10% to 12% rally, says this strategist

Analysts attributed Monday’s equity gains to President Joe Biden, who said he’s weighing reducing tariffs on Chinese goods that had been imposed during the Trump administration. Biden also said the U.S. would defend Taiwan from aggression by China, though White House officials later said there had been no change to U.S. policy. Washington has long pursued a policy of strategic ambiguity around Taiwan.

Read: In Tokyo, Biden set to launch new Indo-Pacific trade pact to replace TPP

“There’s some relief buying and one of the big catalysts for today’s rally is Biden’s remarks, which could represent a major de-escalation of the trade war and really surprised markets,” said Edward Moya, senior market analyst for the Americas at Oanda.

“If we continue to see progress in the easing of tensions between the U.S. and China, that could provide much needed relief to multinationals and traders would be more optimistic with the globalization trade and easing of inflationary pressures,’’ Moya said via phone.

See: Buy the dip or sell the ‘rip’?: What’s ahead for stock investors as ‘sticky’ inflation fears heighten consumer concern

On Friday, the S&P 500 traded below 3,837.25, the level that marks a 20% pullback from its Jan. 3 record close, but managed to eke out a gain. A finish below that level would have confirmed a bear market for the large-cap benchmark.

US : Dow Jones Global
+91.74 +0.27%
Volume: 0.00
June 7, 2023 5:31p
-16.33 -0.38%
Volume: 0.00
June 7, 2023 5:31p
US : Nasdaq
-171.52 -1.29%
Volume: 5.29B
June 7, 2023 5:16p
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