The S&P 500 rose to a new record-closing high on Tuesday, finishing above its previous all-time high in February and fully recovering its losses from the selloff caused by the coronavirus pandemic.
The S&P 500 was up 0.2% on Tuesday, while the Dow Jones Industrial Average fell 0.3% and the tech-heavy Nasdaq Composite gained 0.7%
The S&P finished above its old record-closing-high of 3,386 set back in February, while also surpassing its previous intraday high of 3,393 earlier on Tuesday.
Earlier this year, the index tumbled over 30% from its February record as the coronavirus pandemic sent the economy into a recession.
“It’s hard to believe, but the 2020 bear market is officially over,” wrote Solita Marcelli, chief investment officer Americas for UBS Global Wealth Management, in a recent note.
The Nasdaq also hit a new record high on Tuesday, while the Dow lagged as shares of Home Depot and Walmart both fell, despite reporting second-quarter earnings that beat expectations.
Home Depot said sales jumped 23% as consumers, stuck at home, took on more do-it-yourself projects, while Walmart reported sales rising by over 9%—with e-commerce sales surging 97% last quarter.
Shares of Big Tech companies moved higher again on Tuesday: Amazon rose nearly over 4%, while Netflix and Google parent Alphabet both gained around 2%.
“Many continue to wonder why stocks are at new highs with 10% unemployment and nearly a million people filing for initial unemployment claims. . . . The truth is economic data is backward-looking and stocks are looking ahead to a much brighter future,” says Ryan Detrick, chief investment strategist for LPL Financial. “From a 34% bear market to new highs, 2020 is record-breaking and heartbreaking all at the same time.”
With U.S. lawmakers stuck in a “stalemate” over the provisions of the next coronavirus stimulus bill, it could take weeks for an agreement to be reached, as the Senate has now adjourned until September. Treasury Secretary Steven Mnuchin told CNBC on Tuesday that Democratic leaders are unwilling to “strike a reasonable deal” on a smaller coronavirus relief package, which Senate Republicans have pushed for.
What to watch for
There are still a multitude of risk factors for markets, such as a resurgence in coronavirus cases, failure to pass another relief bill and the upcoming presidential election, says Brian Price, head of investment management for Commonwealth Financial Network. “Investors are encouraged that we’re back near all-time highs in the market, but they’ll need to stay vigilant for what lies ahead over the coming months.”