U.S. stocks finished in the green on Tuesday as the Nasdaq cemented its best January performance since 2001 amid a broad-based rally in equities that saw some of 2022’s worst performers take the lead. The S&P 500 SPX gained 58.83 points, or about 1.5%, to finish January at 4,076.60, a gain of 6.2% for the month, according to Dow Jones Market Data. That’s the large-cap index’s best monthly gain since October, and its best January since 2019, something that is also true for the Dow. The Nasdaq Composite COMP rose by 190.74 points, or 1.7%, to 11,584.55 on Tuesday, bringing its gain for January to 10.7%. January was also the tech-heavy index’s best month since July. The Dow Jones Industrial Average DJIA rose by 368.95 points, or 1.1%, to 34,086.04, gaining 2.8% for the month, its best such performance since November. Markets rose in January with the Nasdaq rising for four weeks straight, driven by signs of slowing inflation and hopes that the Federal Reserve might soon end its most aggressive campaign of interest-rate hikes since at least the 1980s. Investors also cheered signs that the U.S. labor market has remained strong, absorbing layoffs from a spate of firms in the finance, technology and media spaces. U.S. economic growth remained robust to finish off last year, with the advance reading on fourth-quarter GDP released last week showed growth of 2.9% year-over-year, a headline number that was larger than economists’ expectations. However, some economists have highlighted signs of trouble brewing beneath the surface, as the pace of consumption growth appears to have slowed, and other signs show a slowdown in spending on consumer goods in the face of inflation. Cyclical sectors including consumer discretionary stocks, communications services stocks — a sector that includes many megacap technology names and media companies — information technology, materials and financials led performance on the S&P 500. Some of last year’s worst performers saw strong gains, with Tesla Inc. TSLA, Amazon.com Inc. AMZN and Meta Platforms Inc. META all rising more than 20%.
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