190430 Nasdaq
A monitor displays signage in front of the Nasdaq MarketSite in the Times Square area of New York, U.S., on Friday, April 26, 2019. Image Credit: Bloomberg

New York: Wall Street stocks bounced Tuesday starting a holiday-shortened week on a positive note as investors debated whether the rally could signify a market comeback.

After bruising losses last week, the Dow Jones Industrial Average finished up 2.2 per cent at 30,530.25.

The broad-based S&P 500 jumped 2.5 per cent to close at 3,764.79, while the tech-rich Nasdaq Composite Index also won 2.5 per cent to 11,069.30.

Analysts described the market as primed for a rally after heavy losses for most of 2022 that have left stocks “oversold” on a short-term basis.

A series of aggressive interest rate increases by the Federal Reserve and other central banks have exacerbated worries about a recession.

Goldman Sachs analysts now see a 48 per cent probability of a recession in the next two years compared with 35 per cent previously, according to a note released late Monday.

“The question becomes: Is this another bear market rally, which means it’ll last for a little bit of time and then roll over and hit new lows, or is it the bottom, meaning a more sustained rally is going to follow,” said Adam Sarhan of 50 Park Investments.

Quincy Krosby of LPL Financial was encouraged by Tuesday’s strong finish to the trading day.

“By every metric, the market was oversold. And therefore, the market was due for a bounce, a rally,” Krosby said.

Among individual companies, Kellogg jumped 2.0 per cent after unveiling a plan to split into three companies, including a growth-oriented venture around the cereal brand’s global snacks brand.

Lennar gained 1.6 per cent after the homebuilder reported higher profits. The company has seen a low level of cancelations, but cautioned that higher borrowing rates were a concern.