Here's what happened to the stock market on Tuesday

In this article

Unprecedented Fed policies drive James Bianco out of the bear camp

Dow Jones Industrial Average rises 526 points

The Dow jumped 526.82 points, or 2%, to close at 26,289.98. The S&P 500 climbed 1.9% to 3,124.74. The Nasdaq Composite advanced 1.8% to 9,895.87. Record-setting U.S. data, positive coronavirus trial results and the potential for more fiscal stimulus sparked a rally on Wall Street.

Retail sales surge

The U.S. government reported a 17.7% jump in retail sales for May, a record. The print easily beat a Dow Jones estimate of a 7.7% gain. Tuesday's data comes as states continue to reopen following the coronavirus-induced shutdown. Meanwhile, trial results announced Tuesday showed dexamethasone — a widely available drug — can help critically ill coronavirus patients. Sentiment was also lifted after Bloomberg News reported, citing people familiar with the plan, the Trump administration is drawing up a $1 trillion infrastructure proposal.

Caterpillar leads Dow, Apple jumps

Caterpillar was the best-performing Dow stock, jumping 5.3%. Apple, meanwhile climbed 2.7% after a Citi analyst hiked his price target on the tech giant to a Street high of $400 per share.

What happens next?

Mortgage applications and housing starts data are set for release Wednesday.

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