U.S. stock indexes rebounded on Tuesday from a recent bout of losses as upbeat economic data soothed investor worries about an imminent recession triggered by the Federal Reserve’s aggressive interest rate hikes.
Separate reports showed new orders for key U.S.-manufactured capital goods unexpectedly rose in May, and sales of new single-family homes surged in the same month, while U.S. consumer confidence increased to near 1-1/2 year high in June.
“All the data we have is a confirmation to investors, as they climb this wall of worry that the economy has weakened but not collapsing,” Robert Pavlik, senior portfolio manager at Dakota Wealth.
Signs of resilience in the U.S. economy helped pull the blue-chip Dow out of a six-day slump and boosted the economically sensitive Dow Transports index (.DJT) and the small-cap Russell 2000 index (.RUT).
The PHLX Housing index (.HGX) jumped 2.8% to hit an all-time high.
Traders are pricing in a 79.4% chance the Fed will raise interest rates by 25 bps to 5.25%-5.50% range in its July meeting, according to CME Group’s Fedwatch tool, up from 74.4% a day earlier.