By Yasin Ebrahim
Investing.com -- The S&P 500 closed higher Tuesday, as investors piled into to beaten tech sectors ahead of the Federal Reserve decision on Wednesday.
The S&P 500 rose 2.1%, the Dow Jones Industrial Average rose 1.8%, or 599 points, the Nasdaq Composite gained 2.9%.
Tech found its footing, climbing more than 3% as the recent weakness in big tech and chip stocks appeared to entice dip-buying action.
Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) led the gains in big tech, with both up more than 2% and 3% respectively, while NVIDIA (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) also racked up gains.
Also helping tech, Treasury yields took a breather somewhat from their recent melt-up just as the Fed kicked off its two-day meeting.
With the odds of the 25-basis point nearly fully priced in, investor attention will be focused on the Fed’s summary of economic projections to gauge the shift in interest rate expectations for this year.
Commentary on how committed the Fed is on tackling inflation will also be closely watched. If the central bank indicates that it favors a wait and see approach that could stoke worries about whether the Fed is able to get inflation under control at time when concerns about a recession ahead continue to increase.
“I think the market will be disappointed if the Fed strikes a tone that we're going to raise rates by 25 basis points and then see how things go,” Dean Smith, chief strategist and portfolio manager at FolioBeyond said in an interview with Investing.com on Tuesday.
Sentiment on the broader market was also helped by easing concerns that higher for longer oil prices would dent global growth as WTI fell further below $100 a barrel.
Valero Energy (NYSE:VLO), Baker Hughes (NYSE:BKR), Exxon Mobil (NYSE:XOM) were among the biggest decliners in the energy sector, which was the only sector in the red.
The fall in oil prices wasn’t stemmed by signs that an imminent diplomatic solution to end war appears to be some ways off after Russian President Vladimir V. Putin reportedly said that “Kyiv is not demonstrating a serious attitude towards finding mutually acceptable solutions.”
Industrials, meanwhile, were pushed higher by the airline stocks after Southwest, United Airline and Delta reported stronger than expected bookings and signaled a quicker than expected recovery in travel demand.
American Airlines (NASDAQ:AAL), and United Airlines (NASDAQ:UAL) were up more than 9%, while Delta Air Lines (NYSE:DAL) was up more than 8%.
In other news, Starbucks (NASDAQ:SBUX) increased nearly 5% after it teamed up with Volvo Cars to explore the potential of installing electric vehicle chargers throughout its stores nationwide.
Big Lots (NYSE:BIG) jumped 15% after one of its investors, Mill Road, a private equity firm, urged the board to explore a sale in the range of $55 to $70 per share. The stock closed at $31.99 on Monday.