- Energy, financials could be better bets — BofA
- Optimism about Q2 earnings persists
- On the day, Dow up 0.3%, S&P 500 up 0.8%, Nasdaq up 1.5%
(Reuters) - The S&P 500 and Nasdaq finished June on Tuesday with their biggest quarterly gains since 2020 as investors remained upbeat about economic and earnings growth even amid the Middle East conflict.
The Dow had its biggest quarterly jump since 2022.
The indexes ended higher for the day as well, with the Dow registering a record closing high for the second straight day. Technology led gains among S&P 500 sectors, and an index of semiconductor stocks finished 3.9% higher on the day.
Optimism over signs of progress in efforts to bring the Iran war to a lasting halt has helped stocks recently despite continued military tensions.
Iran and the U.S. on June 17 signed a memorandum of understanding aimed at ending the four-month-old conflict. But exchanges of fire over the weekend have tested that agreement, and a Qatari official said on Tuesday that top U.S. envoys who have arrived in Doha will not hold a high-level meeting with Iran.
"We've had a great first half of the year, certainly better than most expected," said Oliver Pursche, senior vice president and advisor for Wealthspire Advisors in Westport, Connecticut.
"In spite of all the geopolitical stuff, the U.S. economy is performing well and corporate earnings are strong."
After a strong first-quarter earnings season for S&P 500 companies, investors are looking forward to second-quarter results in the coming weeks.
A sharp rise in oil prices at the start of the war ramped up concerns about inflation and interest rate hikes. Traders are pricing in at least one rate hike by the Federal Reserve by the end of 2026, according to data compiled by LSEG.
The Dow Jones Industrial Average rose 136.46 points, or 0.26%, to 52,319.20, the S&P 500 gained 58.93 points, or 0.79%, to 7,499.36 and the Nasdaq Composite gained 393.58 points, or 1.52%, to 26,213.72.
Weakness in heavyweight technology shares has weighed on the market in recent weeks, and the S&P 500 and Nasdaq both registered losses for the month of June.
Investors have been concerned about lofty valuations in the tech sector and continued massive spending on AI by tech companies.
For the quarter, the Dow was up about 13%, the S&P 500 gained 14.9% and the Nasdaq rose 21.4%.
Strategists at BofA said cyclical, value-oriented sectors such as energy and financials could be the better bet heading into the second half.
After the closing bell, shares of Nike were down about 2% following the company's release of quarterly results.
Advancing issues outnumbered decliners by a 1.06-to-1 ratio on the New York Stock Exchange. There were 349 new highs and 154 new lows on the NYSE.
On the Nasdaq, 2,651 stocks rose and 2,318 fell as advancing issues outnumbered decliners by a 1.14-to-1 ratio. The S&P 500 posted no new 52-week highs and no new lows while the Nasdaq Composite recorded no new highs and no new lows.
Volume on U.S. exchanges was 19.97 billion shares, compared with the 23.40 billion average for the full session over the last 20 trading days.
Reporting by Caroline Valetkevitch in New York and Niket Nishant in Bengaluru; Additional reporting by Avinash P in Bengaluru; Editing by Joyjeet Das and Matthew Lewis
Source: Reuters