Dow Jones Industrial Average Soars As Technology, Financial Stocks Rally Amid June Interest Rate Hike Expectations

This story was updated at 4:05 p.m. EDT.

U.S. stocks rose to their highest point in the last seven sessions Tuesday, helped by gains in technology and financial stocks.

The Dow Jones Industrial Average closed the day up 213 points, or 1 percent, at 17,706, and the S&P 500 index was up 28 points, or 1.4 percent, at 2,076. Tech shares soared, helping the Nasdaq Composite index rise 95 points, or 2 percent, to 4,861.

The S&P financial sector got a big boost from a rise in banking stocks as investors speculated on the possibility of a June interest rate hike. Bank of America, JPMorgan and Citigroup were all up almost 2 percent each.

Minutes of the Federal Reserve’s April meeting suggested a June rate hike had not been ruled out, surprising investors who had thought the Fed would stand pat until the end of the year.

“I think investors are becoming more comfortable with an early rate hike because even if the Fed does raise rates in June, it will remain extremely accommodative,” said Art Hogan, chief market strategist at Wunderlich Securities in New York.

“I think the Fed wants to recalibrate the market’s expectations regarding a hike.”

Several Fed officials struck hawkish tones in separate speeches on Monday, calling for two or three rate hikes in 2016 if supported by economic data.

Fed Chair Janet Yellen speaks on Friday.

Traders are now pricing in a 39 percent chance of a June hike, up from 4 percent last week, as inflation creeps toward the Fed’s 2 percent target rate and the labor market strengthens.

Data on Tuesday showed new U.S. single-family home sales surged to a more than eight-year high in April and prices hit a record high, offering further evidence of a pickup in economic growth.

The Philadelphia Housing Index climbed to a one-month high after the data.

The S&P rose above its 50-day moving average for the first time in four days. The index has not closed above the closely watched metric in almost two weeks.

The gains were broad-based, with all 10 S&P sectors in the black. The technology index’s 2 percent rise led the advance.

Oil reversed early losses to turn positive, as investors awaited crude oil inventory data from the United States that was expected to show a shrinking supply overhang.

Toll Brothers shares were up 9 percent at $29 as the homebuilding company’s quarterly revenue beat expectations.

Twitter fell as much as 3 percent to a record low below $14 after brokerage MoffetNathanson downgraded the company’s stock to “sell” from “neutral.”

Data from Reuters were used to report this story.