“A sustained equities pullback would be hard to argue but there are growing calls for a pullback of some 10 percent in US equities due to concerns of overpricing,” said Ed Moya, an analyst at New York-based online broker OANDA.
The Dow Jones Industrial Average, Wall Street’s broadest stock indicator comprising mostly industrial stocks, closed up 316 points, or 0.9 percent, at 34,160. It had fallen a combined 1.1 percent over the past two sessions after hitting a record high at 34,257 on Friday. For the year, the Dow remains up 11.5 percent.
The S&P 500 index, which groups the top 500 stocks on the New York Stock Exchange, settled up 37 points, or 0.9 percent, at 4,172. It fell 1.2 percent between Monday and Tuesday, after hitting an all-time high at 4,185 on Friday. The S&P remains up 11.1 percent on the year.
The technology-laden Nasdaq Composite Index finished up 164 points, or 1.2 percent, at 13,950. Nasdaq fell almost 2 percent in the past two sessions, leading to concerns about overvaluation in its stocks, which group high-flying names such as Facebook, Apple, Amazon, Netflix and Google. The tech sector index is up 8.2 percent on the year.
Stocks have rallied beyond investor expectations of late after a rash of bullish US data on housing, inflation and jobs that indicated faster-than-expected recovery from the coronavirus pandemic.
The US economy shrank 3.5 percent in 2020 from lockdowns forced by the COVID-19, after a 2.2 percent growth in 2019. The Federal Reserve has forecast economic growth of 6.5 percent for 2021.