Investors came back from the Presidents Day long weekend rested, refreshed and a little more optimistic on equities.
The S&P 500 added 1.7% on Tuesday, the Dow Jones Industrial Average was up 1.4%, or 223 points, and the Nasdaq jumped 2.3%. Stocks enjoyed their best session of the year on Friday.
But don't get too used to this upward momentum. Some analysts argue this two-day rally could just be a symptom of the recent market volatility.
"Fears over the prospects of a recession are rising," said Bob Doll, chief equity strategist at Nuveen Asset Management, pointing to recent sentiment on Wall Street. "We do not believe a recession is likely, but we acknowledge that it will take time for financial markets to stabilize and better data to emerge. Unfortunately, this means confusion and turmoil could be the order of the day for several more weeks or even months."
The Volatility Index, otherwise known as the 'fear index,' remains above the elevated 20-level, though it fell 5% on Tuesday.
Others, however, predict the tide will turn in the next few weeks as some investors take advantage of cheaper prices for equities.
"The rally seen at the end of last week on many markets, which has continued into this week, suggests that savvy investors are now beginning to use the recent panic over oil to their financial advantage," Nigel Green, CEO and founder of the deVere Group, wrote in a note. "It's our experience in recent weeks that a growing number of global investors are turning their backs on the herd mentality, which like so many times before, has gripped the masses."
High-momentum tech and consumer names led Wall Street higher on Tuesday. Tech giants including Apple AAPL , Alphabet GOOGL , Microsoft MSFT , Cisco CSCO and IBM IBM were higher, while the Technology Select Sector SPDR ETF XLK added 1.6%. Among the best performers in consumer discretionary, Netflix NFLX , Tesla TSLA , Priceline PCLN , and Walt Disney DIS were all in the green, while the Consumer Discretionary SPDR ETF XLY jumped 2.3%.
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Gold took a tumble on Tuesday after Goldman Sachs analysts urged clients to short the precious metal. Analysts argued that financial markets have been oversold and that gold prices would soon pull lower as investors dip their toes back into equities again. Gold suffered its steepest single-session decline in nearly a year on Tuesday.
Crude oil turned lower despite an initial surge on news Russia and several key Organization of Petroleum Exporting Countries agreed to a production freeze. Russia's energy minister said the country agreed with Saudi Arabia, Qatar and Venezuela to freeze oil production levels if other producers follow suit.
"On the surface it appears to be a landmark agreement," said Robbie Fraser, commodity analyst at Schneider Electric. "However, a closer examination reveals that the agreement is unlikely to aid a market that remains chronically oversupplied. For an OPEC production freeze to have any meaningful long-term impact on the market it would likely need to incorporate 2015's production growth leader (Iraq), as well as the expected source of production growth for the year ahead (Iran)."
The closed-door meeting in Qatar's capital of Doha came as oil prices plumbed new 13-year lows on record production levels, global oversupply, and signs of weaker demand. Reports suggested Iran will not agree to such production cuts. West Texas Intermediate crude oil fell 1.4% to $29.04 a barrel.
Manufacturing activity in the New York region improved modestly in February, though remained in contraction for the seventh straight month. The Empire State Manufacturing Survey narrowed to a reading of negative 16.6 this month after a reading of negative 19.4 in January. However, economists expected conditions to improve to a reading of negative 12.
Sentiment among homebuilders fell further from 10-year highs in February, according to the National Association of Home Builders. A read on sentiment fell 3 points to 58 this month as builders responded to consumer worries over the economy. The index climbed to its highest level in a decade in October.
Groupon GRPN added more than 40% after a new securities filing from Alibaba BABA showed the Chinese e-commerce site owning 33 million shares, worth a total stake of $95 million. Investors hope the 5.6% stake leads to possible sale talks.
Home security company ADT ADT surged 50% after agreeing to be acquired by private-equity firm Apollo Global Management. The all-cash deal worth $42 a share values ADT at a 56% premium to its closing price last week.
Pfizer PFE shares were 1.2% higher despite the company revising its fourth-quarter results lower after settling claims over its Medicaid rebates. The drugmaker said it lost 3 cents a share in its fourth quarter, down from previously reported profit of 10 cents a share.
Hormel Foods HRL climbed 6.6% after nearly doubling quarterly profit. The food company generated earnings of 43 cents a share, above consensus of 37 cents a share. Hormel also boosted its full-year earnings guidance.