Tuesday's Stock Market Close: US Equities Rise Although Protests, Street Violence Continue

U.S. stocks climbed in choppy trading on Tuesday as investors ignored growing civil unrest and focused more on hopes for an economic rebound as more states reopen businesses.

The Dow Jones Industrial Average gained 267.63 points to 25,742.65, while the S&P 500 rose 25.09 points to 3,080.82 and the Nasdaq Composite Index climbed 56.33 points to 9,608.37.

Tuesday’s volume on the New York Stock Exchange totaled 4.38 billion shares with 2,118 issues advancing, 54 setting new highs, and 830 declining, with four setting new lows.

Active movers were led by Genius Brands International Inc. (GNUS), General Electric Co. (GE) and NIO Inc. (NIO).

Civil unrest continued unabated in cities across the U.S. despite heavy police presence and imposition of curfews. New York City has ordered a curfew until June 7 to halt protests.

On Monday evening, President Donald Trump threatened to deploy military forces if states and cities could not curb the protests, looting and violence.

“I am mobilizing all federal and local resources, civilian and military, to protect the rights of law-abiding Americans,” Trump said. “If a city or state refuses to take the actions necessary to defend the life and property of their residents, then I will deploy the United States military and quickly solve the problem for them.”

“The main focus once again appears on the longer-term prospects of the easing of lockdowns across the world, though if the violence on U.S. streets continues for much longer, U.S. investors might have to cope with a lockdown of a different kind, imposed by the National Guard,” said Michael Hewson, an analyst at CMC Markets.

The Congressional Budget Office warned on Monday that the covid-19 pandemic may wipe out $8 trillion from the U.S. economy over the next decade.

“Good news on vaccines helped stocks in May, but U.S.-China relations and civil unrest could steal the spotlight in June,” said Lori Calvasina, RBC’s chief U.S. equity strategist. “The S&P 500 remains highly news flow driven.”

On Monday, China requested state-owned companies to stop purchases of soybeans and pork from the U.S.

“The disconnect between stocks and the economy generated widespread concern among some investors,” said Jeff Buchbinder, equity strategist for LPL Financial. “At the same time, reopening optimism and massive stimulus overshadowed some concerns about a second wave of COVID-19 infections and increasing U.S.-China tensions.”

Overnight in Asia, markets finished higher. China’s Shanghai Composite edged up 0.2%, Hong Kong’s Hang Seng gained 1.11% and Japan’s Nikkei-225 rose 1.19%.

In Europe markets closed higher, as Britain’s FTSE-100 rose 0.87%, France’s CAC-40 gained 2.02% and Germany’s DAX jumped 3.75%.

Crude oil futures jumped 4.15% at $36.91 per barrel, Brent crude edged up 0.23% at $39.66. Gold futures fell 0.89%.

The euro edged up 0.28% at $1.1165 while the pound sterling rose 0.42% at $1.2542.

The yield on the 10-year Treasury rose 2.72% to 0.68% while yield on the 30-year Treasury gained 1.65% to 1.479%.