Stocks rose broadly on Tuesday as Wall Street wrapped up its best quarterly performance in decades.
The S&P 500 traded 1.1% higher while the tech-heavy Nasdaq Composite advanced 1.5%. The Dow Jones Industrial Average advanced 145 points, or 0.6%. The major averages hit their session high with less than an hour left in the session.
Shares of Facebook and Netflix rose more than 2% each to lead the gains while Amazon advanced 2.7%. Micron also contributed to the gains, climbing more than 4% following the company’s better-than-expected earnings report. Micron also gave strong forward revenue guidance. Shares of Lululemon gained 5.2% on news it will acquire at-home fitness company Mirror for $500 million.
Both the Dow and S&P 500 were on pace for their best quarterly performance since 1998, surging more than 16% each. The Nasdaq Composite, meanwhile, was up 29.7% quarter to date and was headed for its biggest quarterly gain since 2001.
“A combination of 1) Stimulus, 2) Positive trends in the virus, 3) Economic reopenings and 4) Hopes for a vaccine drove stocks higher in Q2,” wrote Tom Essaye, founder of The Sevens Report. “As we begin Q3, only one of those tailwinds is currently in place: Stimulus. That doesn’t mean we’ll see a correction, but be suspect of market rallies until we can add more forces supporting stocks, because we’re one stimulus disappointment away from an ugly day.”
Tuesday was also the last day of the month, with the major averages on pace for their third consecutive monthly gain. The Dow was up 0.7% for June. The S&P 500 and Nasdaq were up 0.9% and 5.2%, respectively, month to date.
“It’s difficult to see the market continue the way it has been throughout the summer,” said Quincy Krosby, chief market strategist at Prudential Financial. She noted the market could become increasingly volatile if the number of coronavirus cases keeps rising and if some of the proposed virus treatments and vaccine fail. “That’s not only going to impact the biotechnology companies, but the broader market as well.”
Wall Street was coming off sharp gains, with the Dow surging more than 500 points on Monday. The S&P 500 and Nasdaq also rallied more than 1%.
Those gains came amid a backdrop of increasing coronavirus cases in the U.S. and states’ attempt to reopen from the shutdown. U.S. governors are walking back or delaying reopening plans as Covid-19 cases climb around the country.
Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin testified before the House Financial Services Committee. The joint hearing addressed the Fed and Treasury’s response to the coronavirus pandemic.
In remarks he delivered Tuesday, Powell said uncertainty reigns over the outlook for the economy in the wake of the coronavirus pandemic.
“Output and employment remain far below their pre-pandemic levels. The path forward for the economy is extraordinarily uncertain and will depend in large part on our success in containing the virus,” Powell said. “A full recovery is unlikely until people are confident that it is safe to reengage in a broad range of activities.”
“The path forward will also depend on the policy actions taken at all levels of government to provide relief and to support the recovery for as long as needed,” Powell added.
Meanwhile, Mnuchin told Congress the economy is in a strong position to recover from the coronavirus.
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