Stocks rise on Wall Street as China eases quarantine rules

NEW YORK –

Wall Street’s morning trading saw stocks rise broadly Tuesday, giving major indexes a strong push higher after a slow start to the week.

The S&P 500 rose 0.5% as of 10:12 a.m. Eastern. The Dow Jones Industrial Average climbed 199 points or 0.6% to 31,644 while the Nasdaq climbed 0.1%.

After China relaxed the quarantine requirement for foreigners arriving from China, travel-related businesses were among the largest gainers. This raised hopes that the severe pandemic lockdowns might be beginning to ease.

United Airlines rose 6.3%, Wynn Resorts rose 8.8%

Energy stocks also saw solid gains as crude oil prices in the U.S. rose 1.5%. Hess rose 5.4%.

Treasury yields rose. The yield on the 10-year Treasury Note, which helps determine mortgage rates, rose from 3.19% to 3.22% late Monday.

As investors face a host of concerns, including rising inflation that is squeezeing consumers and businesses, the Chinese government has relaxed quarantine rules. Increased restrictions in China regarding COVID-19, which has exacerbated supply chain issues that have been the root cause of rising inflation, have made these problems worse over the past several months.

Businesses have been increasing prices on everything, from food to clothing. The Russian invasion of Ukraine in February placed even more pressure on consumers, raising energy prices and pushing gasoline prices to new highs. As the economy recovered from the effects of the pandemic, consumers were already shifting their spending to services. However, the increased pressure from inflation has caused a sharper shift away from discretionary items to necessities.

The Conference Board, a business group, reported Tuesday that consumer confidence fell in June. The results were also weaker than economists had expected.

The central banks are making a drastic shift in their policy after years of maintaining low rates to encourage economic growth. Investors are concerned that they might go too far and cause a recession by trying to slow down the economy’s growth. However, key economic indicators like retail sales are already slowing.

Investors await comments from central bank chiefs Jerome Powell (Fed Chair) and Christine Lagarde (European Central Bank chief) expected for midweek. On Wednesday, the Commerce Department will release a report on the first quarter gross domestic product. Investors will also be updated on U.S. economic performance.

Wall Street is also getting ready for the latest round corporate earnings in the coming weeks. This will give a better picture of how companies deal with rising costs and consumers cutting back on spending.