Stocks Rise Despite Uncertainties Keep Wall Street shaky

• The S&P 500 rose 39.25 points, or 1%, to 4,160.68, reversing a 1% drop in the morning.
• Stocks initially dipped on Wall Street as Target warned of reduced profit margins as it reduces prices to clear out inventory.
• The fragility of the economy has been on Wall Street’s mind this year, amid concerns about interest-rate hikes from the Federal Reserve.

US equities rose on Tuesday as Treasury yields fell, but Wall Street remains shaky as investors await more clarity on the direction of interest rates, inflation, and the economy.

The S&P 500 rose 39.25 points, or 1%, to 4,160.68, reversing a 1% drop in the morning. The Dow Jones Industrial Average increased 264.36 points, or 0.8 percent, to 33,180.14 after bouncing back and forth throughout the day. The Nasdaq composite rose 113.86 points, or 0.9%, to 12,175.23.

Gains in Apple, Microsoft, and other technology stocks were among the most powerful drivers driving the market higher. They profited from a reduction in Treasury yields, with the 10-year yield returning to below 3%. Lower rates in recent years have encouraged investors to pay higher prices for stocks, particularly those of fast-growing companies.

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Energy producer stocks also surged as oil prices rose to about $120 per barrel, up more than 55% year to date. Exxon Mobil rose 4.6 percent, while ConocoPhillips rose 4.5 percent.

Kohl’s stock rose 9.5 percent after the department store giant reported it is in early talks to sell itself to Vitamin Shoppe owner Franchise Group for around $8 billion. J.M. Smucker surged 5.7 percent after reporting earnings that above analysts’ expectations.

Stocks initially dipped on Wall Street as Target warned of reduced profit margins as it reduces prices to clear out inventory. The retail behemoth fell 2.3 percent after announcing changes necessary to keep up with shifting customer patterns. Shoppers across the country are spending more on restaurants and travel than on home improvement, as they did earlier in the year.

Other retailers were affected by the downturn, with Walmart down 1.2 percent.

Worries were heightened further when the World Bank drastically reduced its prediction for economic growth this year. It raised the prospect of “stagflation,” a poisonous mix of high inflation and sluggish growth not seen in more than four decades, by pointing to Russia’s conflict against Ukraine and the prospect of severe food shortages.

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The fragility of the economy has been on Wall Street’s mind this year, amid concerns about interest-rate hikes from the Federal Reserve. The central bank is working hard to combat the worst inflation in decades, but it risks strangling the economy if it goes too far or too fast.

At its meeting next week, the Fed is largely expected to raise its main short-term interest rate by half a percentage point. This would be the second consecutive double-digit increase, with investors expecting a third in July.