Stock Market Today: Dow logs best day since June 2023, small-caps surge 3.5% (2024)

Tuesday's Top Reads

U.S. stocks finished higher on Tuesday with the Dow Jones Industrial Average notching its best day in over a year.

The rotation trade also helped boost the Russell 2000 to its highest closing level since January 2022. The small-cap index jumped 3.5% on Tuesday and rose 11.5% over the last five trading sessions. It was the largest five-day percentage gain for the Russell 2000 since April 2020, according to Dow Jones Market Data.

Yields on U.S. government debt finished lower on Tuesday, driven in part by the view of traders who think the economy should weaken enough to justify three quarter-point rate cuts from the Federal Reserve this year.

The 2-year yield fell less than 1 basis point to 4.445%, the lowest closing level since Feb. 7. Meanwhile, the 10-year rate dropped 6.3 basis points to 4.168%, the lowest closing level since March 12.

U.S. stocks were extending gains in the final hour of trading on Tuesday, with the Dow Jones Industrial Average poised to notch its largest daily percentage advance in over a year.

Dow industrials were surging 726 points, or 1.8%, to trade at session highs as of 3:25 p.m. Eastern time. It would be the largest one-day point gain for the blue-chip index since November 2022 and its biggest daily percentage rise since June 2023, according to Dow Jones Market Data.

The S&P 500 was up 0.5%, while the Nasdaq Composite was nearly flat, according to FactSet data.

The surge in UnitedHealth Group Inc.’s shares accelerated Tuesday afternoon, with its stock posting the top performance in the Dow Jones Industrial Average.

UnitedHealth was advancing 6%, helping to fuel the Dow’s sharp 1.7% gain, according to FactSet data, at last check. The S&P 500 's healthcare sector was up 1.4% Tuesday afternoon, surpassing the S&P 500 index’s gain of 0.5.%.

Bitcoin extended its gain on Tuesday, as investors increased their bets on a Donald Trump victory in November’s U.S. presidential election while looking forward to the launch of spot ether exchange-traded funds.

The largest cryptocurrency by market capitalization climbed to as high as $65,202, its loftiest level since June 20, according to Dow Jones Market Data. Bitcoin is up 53.7% so far this year, but still trades over 11% off of its all-time high at $73,798 reached in March.

Ether also rose on Tuesday, up 0.5% to $3,452.90.

U.S. stocks were seeing spikes across the board on Tuesday afternoon, with the Nasdaq Composite reversing its earlier losses and the Dow Jones Industrial Average on pace for its best day of the year.

Dow industrials were trading near session highs and up 670 points, or 1.7%, at around 40,888. The blue-chip index was on track to notch its biggest one-day point and percentage advance in 2024, according to Dow Jones Market Data.

The Nasdaq was edging up 0.1% after wavering between gains and losses earlier in the session, while the S&P 500 was rising 0.5%, according to FactSet data.

If current economic trends of a softening of both inflation and the labor market continue, the U.S. central bank can begin to cut rates this year, Federal Reserve Governor Adriana Kugler said Tuesday.

"If economic conditions continue to evolve in this favorable manner... I anticipate it will be appropriate to begin easing monetary policy later this year," Kugler said in a speech to a seminar sponsored by the National Association for Business Economics.

If the labor market starts to cool too much, the Fed should cut sooner rather than later, she said. On the other hand, if inflation looks sticky, it may be appropriate for the Fed to hold rates steady "for a little longer," she added.

Traders in derivative markets see the first rate cut coming at the Fed's meeting in mid-September and not the Fed's next meeting in two weeks.

Shares of American Express Co. and Discover Financial Services are climbing Tuesday and heading toward records ahead of the companies' earnings reports later this week.

Amex shares were up 1.9% in afternoon trading Tuesday and on track to clinch a fresh record high, after setting one on Monday as well. That finish was Amex's first new high since May 21. The card company reports results Friday morning.

Discover Financial shares were ahead 3.4% Tuesday, after rising 4.4% to a record close of $137.06 in Monday's session. Discover, which has a merger pending with Capital One Financial Corp., is scheduled to post results Wednesday afternoon.

The Tuesday rallies for Amex and Discover shares come on a generally strong day for financial stocks, after Bank of America Corp. and Morgan Stanley posted upbeat quarterly results.

Gold futures on Tuesday rallied to fresh record-high levels, as expectations for Federal Reserve interest-rate cuts have helped to weaken the dollar and Treasury yields, boosting the metal's investment appeal.

“June’s cooling inflation and job market may be enough impetus for the Fed to start cutting rates soon, which if the cuts start, will likely boost gold,” said Edmund Moy, senior IRA strategist for precious-metals distributor U.S. Money Reserve. “And with new data showing China’s economy continues to struggle, Chinese investors have few alternatives — but gold is one of them.”

If there’s no Fed interest-rate cut in September, however, that could be supportive of the dollar and would keep real interest rates elevated in the U.S. — with both factors "challenging for gold fundamentals,” said Rob Haworth, senior investment-strategy analyst at U.S. Bank Asset Management.

August gold climbed $38.90, or 1.6%, to settle at $2,467.80 an ounce on Comex after trading as high as $2,470.80. Tuesday's prices topped the previous record-high finish of $2,438.50 and all-time intraday high of $2,454.20 -- both from May 20.

Shares of Cathie Wood’s ARK Innovation ETF, which focuses on disruptive innovation as an investment theme in the stock market, are rallying sharply Tuesday.

The fund, which is run by ARK Investment Management founder Wood, was up 2.8% in afternoon trading, according to FactSet data, at last check. Shares of the ETF have soared 11.6% so far this month, but they remain down 6.4% year to date.

The U.S. stock market was mostly rising Tuesday, with the Dow Jones Industrial Average up 1.7%, the S&P 500 index gaining 0.4% and the technology-heavy Nasdaq Composite slipping 0.2%, according to FactSet data, at last check.