The Dow Jones Industrial Average ended an eight-session losing streak with a triple-digit gain, clawing back from some of the heavy losses seen over the past week.
The Dow rose0.73% or 150 points, after falling 1.9% over the previous eight sessions. The S&P 500 also jumped 0.73% and the Nasdaq added 0.60%.
The blue-chip index had suffered its longest losing streak since 2011 after closing Monday with its eighth day of losses in a row. The Dow has not had nine consecutive losses since the late 70s. Stocks were under pressure for much of Monday as Wall Street contemplated the way forward for the Trump White House after its defeat on health care reform.
Crude oil prices closed at their highest level in a week after production hurdles in Libya eased pressure on high global output. A militia in Libya shut down pipelines on Monday in protest of wages.
Prices were also higher ahead of weekly inventories data from the American Petroleum Institute Tuesday and official data from the Energy Information Administration on Wednesday. Expanding stockpiles and increasing production in the U.S. have hit crude oil prices in recent weeks.
West Texas Intermediate crude was up 0.9% to $48.16 a barrel on Tuesday.
Energy stocks were the best performers on markets Tuesday. Major oil companies Royal Dutch Shell (RDS.A) , Chevron (CVX) - Get Chevron Corporation Report , Schlumberger (SLB) - Get Schlumberger NV Report , Enbridge (ENB) - Get Enbridge Inc. Report and ConocoPhillips (COP) - Get ConocoPhillips Report saw modest gains, while the Energy Select Sector SPDR ETF (XLE) - Get Energy Select Sector SPDR Fund Report added 1.4%.
Financials crept higher on Tuesday after a days-long retreat. Banks such as JPMorgan (JPM) - Get JPMorgan Chase & Co. (JPM) Report , Citigroup (C) - Get Citigroup Inc. Report , RoyalBank of Canada (RY) - Get Royal Bank of Canada Report and Westpac (WBK) - Get Westpac Banking Corp Sponsored ADR Report saw slight gains. Goldman Sachs (GS) - Get Goldman Sachs Group, Inc. (GS) Report and JPMorgan led the Dow.
The Federal Reserve's Stanley Fischer straddled the line between dove and hawk. Fed Vice Chairman Fischer told CNBC that a "wait and see" policy was suitable for the Fed and that he anticipates two more interest rate hikes this year, in line with central bank estimates. Fischer also said the Fed keeps an eye on fiscal policy, a crucial move as Donald Trump tries to reform the tax code. Stocks have responded well to a Fed that has faith in the U.S. economic recovery but tightens monetary policy deliberately and gradually.
Areas of high unemployment remain in the U.S. economy even as the overall trend continues lower, Fed Chair Janet Yellen said on Tuesday. In remarks to the National Community Reinvestment Coalition, Yellen said interest rates are not the best way to correct the issue, but rather "effective workforce development options for these communities," including vocational trading and apprenticeships. Yellen said low-income and minority groups are most at risk of these high unemployment trends.
The GOP's failure to repeal and replace Obamacare, a major campaign commitment, was viewed as a litmus test for Trump's ability to achieve major change in Washington. Trump had promised major tax reform and regulatory rollbacks, both which look like tougher sells after the clumsy handling of health care reform -- the bill appeared to be rushed through and was pushed toward a vote even without a healthy margin of support in Congress. The bill was pulled late Friday afternoon after two days of voting delays. House Speaker Paul Ryan said Tuesday that he had not formulated a timeline for a fresh attempt at health care reform.
"The burden of proof for U.S. equities just got a little higher," said David Joy, chief market strategist at Ameriprise Financial. "The failure of health care reform means that the job of tax reform has now been made more difficult. And that is what the market cares more about ... If there is to be a rethinking of equity valuations, it should be limited on the downside by these improving fundamentals. But, there is still room for disappointment if tax reform fails to impress."
Consumer confidence surged in March, continuing upward trends seen in the past few months. Confidence rose to a reading of 125.6 in March, according to the Conference Board, the highest level since December 2000. The index sat at 116.1 in February. Analysts had anticipated a small dip in March after the index reached a post-recession high last month.
Apple (AAPL) - Get Apple Inc. (AAPL) Report ended 2% higher, finishing at a record close of $143.79, after UBS backed its support for the tech company. UBS analyst Steven Milunovich said he could see Apple reaching as high as $200 over the next few years, 40% above its current trading levels, though said his "most likely scenario" was gains to $175.
Ford (F) - Get Ford Motor Company Report rose 1.6% on Tuesday after announcing plans to "create or retain" 130 jobs at its plant in Michigan. The jobs are part of the automaker's plans to increase capacity at its Romeo Engine factory, one of the ways in which Ford will invest $1.2 billion in three of its plants in the state.
Competitor General Motors (GM) - Get General Motors Company (GM) Report was 2.5% higher after investor David Einhorn pushed for the company to generate two classes of stock to divide its dividends from earnings, such as stock repurchases. Einhorn said the plan would unlock significant shareholder value. GM has rejected Einhorn's suggestion. Credit agencies including Moody's said that Einhorn's proposal would likely cause a credit rating downgrade.
American Airlines (AAL) - Get American Airlines Group, Inc. Report took a $200 million stake in China Southern Airlines (ZNH) - Get China Southern Airlines Company Limited Sponsored ADR Class H Report in the second move by a U.S. carrier into the world's fastest-growing commercial aviation market. American will own about 2.68% of China Southern's outstanding shares after paying $1.55 billion Hong Kong dollars ($200 million) for a special issue of 270.6 million shares sold Tuesday by China Southern, which is Asia's biggest commercial airline by traffic.