U.S. equities rose on Tuesday, helped by a bevy of bullish news, including a historic jump in retail sales and positive data from a study in a coronavirus treatment. Stocks were also helped by reports that the Trump administration is preparing a $1 trillion infrastructure bill. 

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• S&P 500 gained 1.9% for its third straight positive day and its best day since June 5
• From record: S&P is 7.92% below its intraday all-time high of 3,393.52 from Feb. 19
• From 52-week low: S&P is up 42.56% from its 52-week low of 2,191.86 from March 23
• Russell 2,000 small caps closed up 2.3% for a third straight positive session
• From Record: Russell 2000 is 15.32% below its 52-week high of 1,715.08
• From 52-week low: Russell 2000 is 50.3% above its recent low on March 18
• All 11 S&P sectors were positive, led by energy which gained 2.82%. – Francolla

Stocks rose on Tuesday, propelled higher by a record jump in retail sales for the month of May. The Dow Jones Industrial Average gained 526 points, or 2%. The S&P 500 rose 1.9%, while the Nasdaq rallied 1.75%. Earlier in the session the Dow gained 847 points, but stocks fell from the highs of the day after Jerome Powell said the Federal Reserve would adjust its corporate bond buying program based on market conditions. – Stevens

The Fed’s decision to buy individual corporate bonds and Fed Chair Jerome Powell’s comments on Tuesday downplaying the program show the central bank balancing “follow-through and expectations management,” said Dominic Nolan, senior managing director at Pacific Asset Management.

Powell told Senators earlier Tuesday that the Fed didn’t want to “run through the bond market like an elephant” with its program, which was an expansion of plans it announced in March.

“You’re trying to balance between ‘we’re here to support you, but don’t get greedy,'” Nolan said. “You can certainly see corporations sitting in a room and saying ‘yeah, let’s raise the liquidity because the Fed has our back’ … At some level, the Fed does have your back, but don’t overshoot. I think that’s a fine line for what the Fed’s trying to balance on the messaging side.” —Pound

Oil prices rose on Tuesday after the International Energy Agency said in its closely watched monthly report that demand loss for the year will be less than previously expected. West Texas Intermediate, the U.S. benchmark, gained $1.26, or 3.39%, to settle at $38.38 per barrel. International benchmark Brent crude settled 3.12% higher at $40.96 per barrel. “Now we are at a time of relative stability in the market,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy. “Unless a new shock in supply or demand knocks on the door, any daily changes in prices are likely to be marginal and a result of usual trading patterns.” –Stevens

The major averages were on track to post strong gains on Tuesday, boosted by a record jump in U.S. retail sales. The Dow traded 2.3% higher, or 580 points, while the S&P 500 gained 2.1%. The Nasdaq was up 1.8%. Those gains put the Dow, S&P 500 and Nasdaq on pace for their biggest one-day rally since June 5. —Imbert

Moody’s Investors Services changed its rating outlook for Yankee Stadium LLC to negative from stable, but the firm kept its Baa1 rating on the organization’s $1.2 billion of debt. Major League Baseball Commissioner Rob Manfred told ESPN on Monday that he was not sure there would be a season this year.

“While annual coverage ratios will materially weaken compared to original expectations, they are forecast to remain above 1.0x owing to the material amount of the ticket sales that occurred before the 2020 season began and the high propensity for these fans to forgo a ticket refund and to apply payments to tickets next season,” the ratings firm said in a news release. —Pound

Improving economic data and a surplus of cash sitting on the sidelines could create a “chase” into the stock market as the second quarter comes to a close, said Andrew Slimmon, the head of applied equity advisors at Morgan Stanley Investment Management.

“The more we see signs that the economy’s reopening, that we see signs of drug development, signs that people are starting to travel again, those who have been on the sidelines are going to feel more comfortable investing, and that’s going to bring more investors back into the market,” Slimmon said. —Pound

The S&P 500’s gains come amid broad gains across stock sectors. In fact, just 19 of the 505 stocks listed in the index were trading lower. Nvidia, ViacomCBS and T-Mobile were among those stocks down on the day. At the exchange level, about six New York Stock Exchange-listed names rose for every decliner. —Imbert

Hotel chain Hilton Worldwide Holdings announced Tuesday that it is eliminating 2,100 corporate jobs and extending current furloughs, reduced hours and pay cuts for up to 90 more days. Hilton first announced pay cuts and furloughs on March 26. The company’s stock has gained about 1% during Tuesday’s session but is now well below its session highs. —Pound

Shares of Royalty Pharmaceutical began trading at $44 per share and have continued to move higher on Tuesday. The stock priced at $28 per share on Monday night, 62% below where it is currently trading. The pharmaceutical company raised $2.2 billion in its IPO, making it the biggest such offering of the year. The stock trades under the ticker RPRX on the Nasdaq. — Pound

The major averages were sharply higher in midday trading as stocks got a boost following a record surge in U.S. retail sales and positive data on a potential coronavirus treatment. The Dow traded more than 400 points higher, or 1.8%. The S&P 500 climbed 1.5% while the Nasdaq advanced 1.4%. —Imbert

• Granite Construction, Vulcan, Summit Materials – Shares of a handful of construction and material companies soared on a Bloomberg News report that the Trump administration is considering a nearly $1 trillion infrastructure proposal. 
• Eli Lilly — Shares of Eli Lilly soared more than 14% after the pharmaceutical company said its breast cancer drug Verzenio met the key goal in a late-stage trial. Wall Street firm Guggenheim upgraded Eli Lilly to buy from neutral following the news.
• WW International— The Weight Watchers parent soared more than 17% after the company said it had 4.9 million subscribers as of June 6, up 7% from a year earlier. Digital subscribers hit an all-time high, getting a boost as more people stayed at home due to the COVID-19 pandemic. — Fitzgerald 

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If there was any doubt about whether the Federal Reserve is weighing negative interest rates in the future, Chairman Jerome Powell appeared Tuesday to shut the door. “In the case of negative rates, we’ve pretty much decided that it’s not something we think is attractive for us here in the United States,” he said during an appearance before the Senate banking committee. Traders at one point had been pricing in a slightly negative policy rate for the Fed by 2022, but that since has changed. The benchmark fed funds rate is targeted in a range between 0%-0.25% and most recently traded at 0.09%, the highest level since March 30. – Cox

Beijing will reportedly shut all schools following a resurgence in coronavirus cases, according to Reuters. China’s capital city will reportedly resume conducting online classes for all age groups. China yesterday reported 40 new cases as a cluster in Beijing linked to a wholesale market continues to grow. – Stevens

Markets and bond yields fell from their highs following Federal Reserve Chair Jerome Powell’s comments that the central bank would arrange its corporate bond buying based on market conditions and it doesn’t want to “run through the bond market like an elephant.” The Fed said Monday it would start buying individual corporate bonds, rather than just ETFs.

“We feel that we need to follow through and do what we said we were going to do. It’s really going to depend on the level market function,” Powell told the Senate banking committee. “If the market function continues to improve, then we are happy to slow or even stop the purchases. If it goes the other way, we will increase. Market function has improved very substantially. That’s why you see very little demand, so far no demand at the primary market. It was out of an excess of caution to preserve these gains from market function by following through. I don’t see us as wanting to run through the bond market like an elephant … We want to be there if things turn bad in the economy.”

The Dow Jones Industrial Average was up about 500 points around the time of Powell’s comments and is now trading up only 200 points. Powell’s comment likely dented sentiment of investors hoping the central bank would continue to support the market with easing measures. — Fitzgerald 

Fed Chair Jerome Powell told the Senate committee on Tuesday that there is a history of racial issues in the economics profession and that he hoped the national discussion of race sparked by George Floyd’s death would push everyone to address those issues. “The economics discipline, like every other aspect of our society, does have a troubled history when it comes to race and inequality,” Powell said. Powell added that the best thing that the Fed can do to help minorities during the current crisis is to return the labor market to where it was pre-pandemic, where historically low unemployment was helping to create wage gains among the lowest paid workers. — Pound

“I don’t think that the balance sheet at anything like its current size presents any real threat to either inflation or financial stability,” Powell said Tuesday during his testimony in front of the Senate banking committee. “So I’m not concerned about the balance sheet and the plans I see for it going forward at this point … I think it’s just something that has to be taken very carefully and very slowly, and it’s not something we’re thinking about now. What we’re thinking about now is providing the accommodation this economy needs for as long as it needs. That’s all we’re thinking about,” he added. — Stevens 

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A measure of U.S. homebuilder optimism jumped the most on record in June amid a bump in mortgage applications and low interest rates, climbing to 58 from a reading of 37 in May. June’s reading from the National Association of Homebuilders was the largest one-month increase since the index’s development in 1985. The sharp move higher came after two months of gloomy outlook, including April’s record 42-point drop, and comes as U.S. states move to relax coronavirus business closures. Readings above 50 indicate more builders believed conditions were good rather than poor; economists polled by Dow Jones had expected a print of 46 for June. — Franck

Testimony from Federal Reserve Chairman Jerome Powell in front of the Senate Banking panel will begin any moment. Powell warned in his prepared remarks ahead of his testimony to Congress that “significant uncertainty remains about the timing and strength of the recovery.” Powell said small businesses and lower-income and minority Americans are particularly at risk as the economy regains its footing following the coronavirus shutdown. Powell will tell the Senate banking committee that while some indicators have shown improvement, there’s still a long way to go during this recovery. — Cox, Fitzgerald 

Former Securities and Exchange Commission chairman Harvey Pitt said on “Squawk Box” that “no one ever really anticipated that people would be gullible enough” to buy bankrupt stocks like Hertz. Pitt also said that, because the rental car company has already filed for bankruptcy, any legal challenge would focus on the investment banks that are helping with the secondary stock offering. Shares of Hertz continued their volatile trading on Tuesday, rising more than 16% in the session’s opening minutes. —Pound

U.S. equities surged on Tuesday, with the Dow Jones Industrial Average jumping 840 points at the opening bell. The S&P 500 and Nasdaq Composite registered gains of 2.8% and 2.3%, respectively. Investors were encouraged by the historic jump in retail sales as well as success in one study with a steroid that reduced coronavirus deaths. — Fitzgerald 

Oil prices rose on Tuesday after the International Energy Agency said in its closely followed monthly report on the oil market that 2020 demand will be better than previously expected. “While the oil market remains fragile, the recent modest recovery in prices suggests that the first half of 2020 is ending on a more optimistic note,” the report said. West Texas Intermediate, the U.S. oil benchmark, rose $1.42, or 3.8%, to trade at $38.54 per barrel. International benchmark Brent crude rose $1.39 to $41.09 per barrel. That said, the IEA predicted that demand will still fall by 8.1 million barrels per day in 2020 — the largest drop on record — and remain depressed through at least 2022 as the impacts of Covid-19 continue to weigh. – Stevens

• Citi raised its price target on Apple to $400 from $310.
• Morgan Stanley downgraded Intel & Nvidia to equal weight from overweight.
• Cowen downgraded Humana to market perform from outperform.
• Bank of America upgraded Cisco to buy from neutral.
• Guggenheim upgraded Eli Lilly to buy from neutral. — Bloom

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Retail sales for May rose 17.69%, for the best gain on record back to 1967. This follow’s April number, which dropped 14.75%, the worst on record. —Francolla

Dexamethasone, a steroid, has reportedly reduced deaths by up to one third in patients hospitalized with Covid-19, the Associated Press reported based on a study in England. The drug helped those who were severely ill and on breathing machines, while doing little for patients exhibiting fewer symptoms. The overall study included more than 11,000 patients, with 2,104 receiving dexamethasone. – Stevens

President Donald Trump weighed in on the historic jump in retail sales on Tuesday morning. “Wow! May retail sales show biggest one-month increase of ALL TIME, up 17.7%. Far bigger than projected. Looks like a BIG DAY FOR THE STOCK MARKET, AND JOBS!,” Trump said in a tweet. — Fitzgerald 

Retail sales for the month of May soared 17.7%, the biggest monthly jump on record, as retailers start to reopen following the coronavirus shutdown. The past two months have seen negative retail sales numbers. Economists polled by Dow Jones were expecting an increase of 8%. Stock futures accelerated gains following the strong economic data. The Dow Jones Industrial Average rose more than 700 points. — Fitzgerald 

McDonald’s said Tuesday its U.S. same-store sales fell just 5.1% in May as the fast food chain reopened dining rooms in its home market. Shares of McDonald’s rose 1% in premarket trading on Tuesday following the news. U.S. same-store sales fell 25% from mid-March through mid-April. — Fitzgerald 

Morgan Stanley on Tuesday downgraded popular chip stock Nvidia to “equal weight” from “overweight,” saying there’s less space for upside given the elevated valuation after the massive rally this year. Nvidia has risen 55% this year, making it the best-performing chip stock in the Nasdaq-100. Morgan Stanley’s downgrade is also a rotation call. The bank is advising clients to shift away from semiconductors in the cloud software business, which have held up during the pandemic, and into underperforming shares of chip companies more leveraged to an economic recovery. –Li

A record number of market participants consider the stock market to be “overvalued,” according to the Bank of America Global Fund Manager Survey, one of the most long running and widely followed polls of Wall Street investors. A net 78% of investors in June said they think the stock market is overpriced, the most since the survey began in 1998 and higher than the levels when the Dotcom bubble burst in 1999-2000. — Melloy, Fitzgerald

Data compiled by Bank of America showed its clients pulled $2.1 billion from equities last week, marking their second straight week of equity outflows. Institutional investors led the outflows, pulling $1.288 billion from stocks. Hedge funds took out $491 million from stocks. —Imbert

The credit market, which had seized up during the start of the coronavirus disruption, is now stabilizing thanks to the Federal Reserve’s unprecedented backstop. And it’s clearing a big overhang for stocks as the distortion in the debt market can be dangerous to the economy and the financial system that has relied on free-flowing credit for years. The central bank announced Monday it is broadening its corporate bond buying approach to include single issues on top of exchange-traded funds and high-yield securities. Credit spreads have tightened to nearly pre-coronavirus levels since the Fed stepped in. –Li

South Korea said North Korea blew up its inter-Korean liaison office on Tuesday morning, according to NBC. South Korea’s Unification Ministry confirmed to NBC News that the liaison office in the North Korean border town of Kaesong was destroyed “by bombing” on Tuesday afternoon local time. Earlier this month, North Korea threatened to permanently shut the liaison office with South Korea as it condemned its rival for failing to prevent activists from sending anti-North Korean leaflets across the border. — Fitzgerald 

A Citi analyst raised his 12-month price on Apple to a Street-high $400 per share from $310 per share, sending the tech giant’s stock up more than 1% in the premarket. The new price target implies an upside of 16.6% from Apple’s close of $342.99 on Monday. Analyst Jim Suva cited five reasons for the higher price target, including upside from Apple’s wearables segment. Suva added he expects Apple to unveil a 5G iPhone later this year. “We do believe that Apple will likely have a strong 5G product offering in time for Christmas 2020,” the analyst wrote. —Imbert

Federal Reserve Chairman Jerome Powell appears before Congress this week to deliver his semiannual report on monetary policy. Powell starts his two-day tour today before the Senate Committee on Banking, Housing and Urban Affairs. Markets generally expect the central bank leader to repeat the tepid economic assessment he delivered following last week’s Federal Open Market Committee meeting, then address a bevy of topics from the legislators. He’ll likely be asked about the potential for the Fed to adopt yield curve control measures, though Dallas Fed President Robert Kaplan on Monday expressed skepticism about that idea. His remarks also come the day after the Fed announced it was firing up its Main Street lending program and expanding its corporate bond purchases from ETFs into individual corporate issues. – Cox

Stocks most sensitive to the economy’s reopening, including retailers, airlines and casinos, led stocks higher during premarket trading on Tuesday. Macy’s and Kohl’s all gained more than 6%, while United Airlines and American Airlines jumped more than 8%. Casino names Wynn Resorts and Las Vegas Sands gained 3% and 2%, respectively. All of these stocks finished Monday’s session lower. – Stevens

The Trump administration is considering pushing for a $1 trillion infrastructure plan to help pull the economy out of the pandemic-induced recession, Bloomberg News reported. The plan would fund provide funds for roads and bridges but also for higher-tech infrastructure, such as 5G and rural internet. —Pound

U.S. equity futures rose on Tuesday after a Bloomberg News report said the Trump administration is preparing a $1 trillion infrastructure bill. The Dow Jones Industrial Average futures rallied 475 points. S&P 500 futures and Nasdaq-100 futures rose more than 1%. 

On Monday, stocks finished in the green after a volatile day of trading. The Dow rose 159 points, having earlier dropped more than 700 points. The S&P 500 and Nasdaq jumped 0.83% and 1.43%, respectively.  Stocks initially fell on concerns about a surge in coronavirus cases in the United States and Beijing. Stocks were helped by the Federal Reserve announcement that it will start buying individual corporate bonds. — Fitzgerald 

— with reporting from CNBC’s Jeff Cox, Yun Li and Fred Imbert. 

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