Wall Street reversed its losses late Tuesday, with the S&P 500 and the Dow reclaiming positive territory by the close in a tug-of-war between stocks that thrived amid lockdowns and those that stand to benefit most from a reopening economy. This report produced by Yahaira Jacquez.
YAHAIRA JACQUEZ: Wall Street reversed its losses late Tuesday with the S&P 500 and the Dow creeping into positive territory by the close. The NASDAQ was the only major US stock index in the session to lose ground, falling half a percentage point. High flying tech stocks, such as Apple and Amazon, weighed on the market for much of the day as investors instead rushed into shares that stand to benefit the most from a reopening economy.
JEROME POWELL: The job is not done.
YAHAIRA JACQUEZ: Investors' anxieties eased after Federal Reserve Chair Jerome Powell in testimony before Congress pushed back against concerns that inflation will become a threat, and signaled no change to the central bank's easy money policies.
JEROME POWELL: The main thing that we can do is continue to support the economy, give it the support that it needs. We're still 10 million jobs below the level of payroll jobs before the crisis. There's still a long way to go.
YAHAIRA JACQUEZ: Max Wolff, economist at Systematic Ventures, says investors are at an inflection point.
MAX WOLFF: So the market has tended to see all the bad news as fabulous, as an insurance that interest rates will stay in the near zero zone and policy will stay accommodative. But I think it's starting to dawn on some people that there's actually a reason for that which isn't so fabulous, which is that for a lot of folks, particularly the bottom 60% to 80% of the income distribution, and for folks who are less able to work remotely and be kind of seamlessly employed before, during, and after the pandemic, there's been a whole lot of loss here.
YAHAIRA JACQUEZ: Tesla closed down more than 2% lower after sliding as much as 13% earlier in the session. The electric car maker dropped amid the tech sell-off and the decline of Bitcoin. The company had recently announced it invested 1 and 1/2 billion into the cryptocurrency, which took a hit on Tuesday.
Meanwhile, home improvement retailer Home Depot posted better than expected quarterly earnings. But it cast doubt on whether spiking sales, driven by consumers taking on do it yourself projects as they spend more time at home, are sustainable going forward. Its shares were the heaviest drag on the Dow, falling 3%