US stocks jump as risk appetite returns to markets

US stocks jumped as risk appetite returned to markets roiled in recent weeks by concerns about global economic growth, surging prices and policy tightening. Treasuries fell with the dollar.

Both the S&P 500 and Nasdaq 100 bounced higher after a late-day tech-led drop Monday. Citigroup Inc. rose after report showed Warren Buffett’s Berkshire Hathaway took a stake in the lender. Walmart Inc. tumbled after cutting its profit outlook due to inflationary pressures, while Home Depot Inc. climbed after boosting its full-year forecast.

Sentiment was buoyed after data showed U.S. retail sales grew at a solid pace last month, the latest evidence that consumers remained resilient in the face of inflation. The value of overall purchases increased 0.9%, after an upwardly revised 1.4% gain in March. Another report in the economy in the euro area expanded more than initially estimated at the start of the year, defying headwinds from the early days of the war in Ukraine.

Treasuries fell, sending yields to session highs after the retail sales data. The dollar weakened against all of its Group-of-10 counterparts except the yen.

“Stock markets are in positive territory once more as investors continue to see value after a substantial sell-off in recent weeks,” said Craig Erlam, a senior market analyst at Oanda. “There’s plenty of economic data and central-bank speak to come this week that could easily make investors nervous once again but for now, there may be a belief that a lot of bad news is priced in.”

St. Louis Fed President James Bullard, a hawk and FOMC voter, stressed Tuesday that inflation is the most pressing issue facing the Fed right now. Five more Fed officials are slated to speak throughout the day, including Chair Jerome Powell.

Meanwhile, Shanghai reported three days of zero community transmission, a milestone that could lead officials to start unwinding a punishing lockdown. Flareups elsewhere in China showed how hard it is to tackle the omicron strain.

Cryptocurrencies weathered the latest stablecoin turbulence, with Bitcoin rising above the $30,000 mark.

What damage will be done to the US economy and global markets before the Fed changes tack and eases policy again? The “Fed Put” is the theme of this week’s MLIV Pulse survey.

What to watch this week:

• Fed Chair Jerome Powell among slate of Fed speakers Tuesday
• Reserve Bank of Australia releases minutes of its May policy meeting Tuesday
• G-7 finance ministers and central bankers meeting Wednesday
• Eurozone, UK CPI Wednesday
• Philadelphia Fed President Patrick Harker speaks Wednesday
• China loan prime rates Friday

Some of the main moves in markets:

Stocks

• The S&P 500 rose 1.5% as of 9:31 a.m. New York time
• The Nasdaq 100 rose 1.9%
• The Dow Jones Industrial Average rose 1.2%
• The Stoxx Europe 600 rose 1.3%
• The MSCI World index rose 1.6%

Currencies

• The Bloomberg Dollar Spot Index fell 0.6%
• The euro rose 0.9% to $1.0532
• The British pound rose 1.2% to $1.2465
• The Japanese yen fell 0.4% to 129.73 per dollar

Bonds

• The yield on 10-year Treasuries advanced nine basis points to 2.97%
• Germany’s 10-year yield advanced 11 basis points to 1.05%
• Britain’s 10-year yield advanced 13 basis points to 1.86%

Commodities

• West Texas Intermediate crude rose 0.4% to $114.69 a barrel
• Gold futures rose 0.7% to $1,826.30 an ounce

–With assistance from Andreea Papuc, Michael Msika and Brett Miller.