By DAMIAN J. TROISE and ALEX VEIGA, AP Business Editors

Energy and tech companies led stocks higher on Wall Street on Tuesday, ending a three-day losing streak in the market.

The S&P 500 rose 1.8%, more than making up for the ground lost the day before. The tech-rich Nasdaq rose 2.4%, while the Dow Jones Industrial Average gained 1.6%.

Small business stocks rose even more than the rest of the market, indicating that investors are feeling more optimistic about the economy. The Russell 2000 rose 2.9%.

The rapidly spreading omicron variant of the COVID-19 virus has weighed on the market in recent weeks, adding to concerns about how the pandemic, rising inflation and lingering global supply chain problems will affect the ‘economy.

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Tuesday’s gains marked a reversal for the market after its recent pullback, but that doesn’t necessarily mean investors are in the mood to buy now.

“The market was oversold, and it became like a stretched rubber band and we had a sharp rollback today,” said Sam Stovall, chief investment strategist at CFRA. “I need to see the follow-up. We might as well see a return of some of those gains tomorrow. “

The S&P 500 gained 81.21 points to 4,649.23. The benchmark is 1.4% off the all-time high it reached on December 10.

The Dow Jones climbed 560.54 points to 35,492.70. Nike, one of 30 stocks in the blue chip index, jumped 6.1% after posting strong quarterly results.

The Nasdaq gained 360.14 points to 15,341.09 and the Russell 2000 gained 63.07 points to 2,202.95. Almost five stocks each rose on the New York Stock Exchange.

The gains follow several days of weakness for major indices as investors assess the impact of skyrocketing omicron cases. Countries in Europe and Asia have put in place various restrictions aimed at reducing the spread and investors are worried about the impact on the global economy.

The latest wave of coronavirus adds to lingering concerns about the impact of rising inflation on economic growth. Supply chain shortages and higher raw material costs hit companies, which passed the higher costs on to consumers. Consumer prices in the United States rose 6.8% in November from a year earlier, marking the fastest rise in inflation in nearly four decades.

Rising inflation has also prompted the Federal Reserve to speed up the withdrawal of its aid to the markets and the economy and put interest rate hikes on investor radar in 2022. The interest rate prospect Higher interest has added some turmoil to the wider market as investors move money around, especially high-value tech stocks.

“We’re not out of the woods yet and we’ll likely see more volatility by the end of the year,” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors.

About 85% of S&P 500 stocks rose. Tech companies accounted for a significant portion of the gains. Citrix Systems climbed 13.6% for the biggest gain in the index. Micron Technology jumped 10.5% after the chipmaker gave investors encouraging earnings forecasts.

A mix of retailers. restaurant chains and other businesses that rely on consumer spending also posted strong gains. Tesla climbed 4.3%, Amazon.com climbed 2%, and Starbucks climbed 2.1%.

Bank stocks were helped by rising bond yields. The 10-year Treasury yield rose to 1.47% from 1.42% on Monday night. Citigroup gained 1.9%.

US crude oil prices rose 4.2% and helped drive energy stocks higher. Chevron rose 1.6%.

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