U.S. equities and stock ETFs surged Tuesday, led by a rebound in technology company shares.
The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEARCA: SPY), iShares Core S&P 500 ETF (NYSEARCA: IVV) and Vanguard 500 Index (NYSEARCA: VOO), were 1.0% higher Tuesday.
Technology companies in the S&P 500 led the charge, rising 1.5% Tuesday.
Market participants remained optimistic over the outlook, pointing to strong earnings, steady economic growth and slightly better valuations following the recent selling.
“We’re focusing less and less on the political backdrop,” Lew Piantedosi, director of growth equity for Eaton Vance, told the Wall Street Journal. “It’s the strength of the economy, not just here, but globally, that matter most to stocks. Earnings have been reasonably healthy for the last few quarters, too.”
The markets also strengthened on growing speculation that the Trump administration could push through tax reforms. U.S. House Speaker Paul Ryan indicated that tax reform would be easier to pass than the failed Obamacare overhaul, Reuters reports.
“Most of the investors that were on the sidelines just needed a little bit of a flare gun that was positive to say that these next few weeks, we’re going to get through them pretty well,” Chris Hyzy, the chief investment officer at Bank of America’s Global Wealth & Investment Management, told Reuters.
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Investors were also looking ahead to the Jackson Hole economic symposium that starts Thursday where a number of top central bankers is set to include Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi. Market watchers are waiting on further details on the Fed’s plans to reduce its bond hoards and clues on when the ECB could cut back on its own asset purchases.
“We’ve been conditioned to expect something out of Jackson Hole each year,” Krishna Memani, OppenheimerFund’s chief investment officer, told the WSJ. “If there is a surprise, it’ll come from [Mr.] Draghi.”
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