U.S. stocks closed higher on Tuesday, lifted by a sharp rally in energy stocks, while the technology sector rebounded after a post-election sell-off.
The Nasdaq composite outperformed, rising 1.1 percent, as Apple and the so-called FANG stocks (Facebook, Amazon, Netflix and Google's parent firm Alphabet) all rose. Technology stocks have taken a hit since the U.S. election, falling more than 2 percent entering Tuesday.
"However, the plunge endured by some of America's largest and greatest technology companies will inevitably offer a fortuitous buying opportunity for investors. The prospects of securing their best absolute returns since 2013 will entice long-short firms to add to their exposure aggressively ahead of year-end once the skittishness underneath the broader market dissipates," Jeremy Klein, chief market strategist at FBN Securities, said in a note.
Financials have been one of the biggest risers since the election, with The SPDR S&P Bank ETF (KBE) surging more than 15 percent since then.
"I think right now the market is enjoying the notion of tax cuts and less regulation," said Quincy Krosby, market strategist at Prudential Financial. She also said the market is waiting for more details regarding President-elect Donald Trump.
The Dow Jones industrial average closed about 55 points higher, notching a new all-time closing high and extending its winning streak to seven days, with Chevron contributing the most gains.
The S&P 500 rose 0.75 percent, with energy rising around 2.7 percent to lead advancers. U.S. crude rose 5.75 percent to settle at $45.81 per barrel amid renewed hopes that OPEC would agree to a production cut.
Equities surged after Trump's win over Democrat Hillary Clinton last week. Market participants were largely expecting Clinton, the former secretary of State, to win the U.S. presidential election, along with several pundits, political analysts and media outlets.
"The general, quick euphoria is coming to an end, but the long-term effects are going to stay," said Randy Warren, CIO at Warren Financial.
The rally in stocks happened against a backdrop of diving U.S. bonds prices. Since Nov. 8, the benchmark 10-year note yield has soared more than 40 basis points. On Tuesday, however, the 10-year yield traded little changed and was last near 2.23 percent.
In economic news, retail sales rose 0.8 percent in October while import prices 0.5 percent, both beating expectations. The November read on the New York manufacturing index also came in above estimates.
"There was little sign in this data of consumer hesitancy ahead of the election that some retailers have blamed (Starbucks and Dunkin Donuts in particular but restaurant/bar sales did fall) for soft October sales," Peter Boockvar, chief market analyst at The Lindsey Group, said in a note.
Other data released Tuesday included business inventories for September, which came in line with expectations. Amid these data reports, Goldman Sachs raised its third-quarter and fourth-quarter GDP estimates by two tenths each, to 3.2 percent and 2.6 percent, respectively.
Investors have been keeping a close eye on economic data, as they assess the likelihood of a December rate hike. According to the CME Group's FedWatch tool, market expectations for a rate hike next month were over 90 percent on Tuesday afternoon. Earlier, Boston Fed President Eric Rosengren said the central bank won't be easily swayed from a December rate hike.
Overseas, European stocks rose, with the pan-European Stoxx 600 index gaining about a quarter of a percent. In Asia, stocks closed mostly lower, with the Shanghai composite falling 0.11 percent and Japan's Nikkei 225 closing just below the flatline. Brazil and Mexican stocks, meanwhile, both rose, with the iShares MSCI Brazil Capped ETF (EWZ) and the Mexico Capped ETF (EWW) advancing 3.4 percent and 1.4 percent, respectively.
The closed up 16.19 points, or 0.75 percent, at 2,180.39, with energy leading 10 sectors higher and real estate the only decliner, falling about two-thirds of a percent.
The Nasdaq composite closed up 57.23 points, or 1.1 percent, at 5,275.62.
About three stocks advanced for every decliner on the New York Stock Exchange, with an exchange volume of 1.0 billion and a composite volume of 4.4 billion.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, was last more than 7 percent lower near 13.45.
Gold futures for December delivery rose $2.80 to settle at $1,224.50 per ounce.
On tap this week:
7:45 a.m. Minneapolis Fed President Neel Kashkari
8:30 a.m. PPI
9:15 a.m. Industrial production
10:00 a.m. NAHB
4:00 p.m. TIC data
5:30 p.m. Philadelphia Fed President Patrick Harker
8:30 a.m. Initial claims
8:30 a.m. CPI
8:30 a.m. Housing starts
8:30 a.m. Philadelphia Fed survey
10 a.m. Fed Chair Janet Yellen testifies before the Joint Economic Committee of Congress on the economy
5:30 a.m. St. Louis Fed President James Bullard
9:30 a.m. New York Fed President William Dudley
9:30 a.m. Kansas City Fed President Esther George
1:30 p.m. Dallas Fed President Rob Kaplan