Stock market live Tuesday: Dow surges 500, JPM jumps on Dimon comment, China worries ruin the close

Stocks started the holiday-shortened week on a high note, building on recent strength. All major averages are coming off a positive week — the Dow’s best since early April — as investors have cheered economies reopening, as well as a potential Covid-19 vaccine. The S&P 500 jumped past 3,000 during Tuesday’s session but failed to close above the threshold after concerns about U.S.-China tensions intensified again. Here’s what happened:

• The Dow gained 530 points, 2.17%, breaking a two-day losing streak.
• The Dow hit its highest level since March 6 in Tuesday’s session.
• The Dow is up 2.67% month to date, on pace for its second positive month in a row.
• Dow impact: Goldman Sachs had the most positive impact on the Dow, adding 111 points to the index.
• The S&P 500 gained 36 points, 1.23%, its third positive session in four.
• The S&P hit its highest level since March 5 in Tuesday’s session.
• The S&P is up 2.72% month to date, on pace for its second positive month in a row.
• SPY impact: JPMorgan had the most positive impact on the SPY, adding 0.26 points to the ETF.
• The Nasdaq Composite gained 16 points, 0.17%, its third positive session in four.
• The Nasdaq is up 5.07% month to date, on pace for its second positive month in a row.
• The Russell 2000 gained 2.77%, its fourth positive session in a row and seventh positive session in eight.
• The Russell 2000 is up 6.29% month to date, on pace for its second positive month in a row.
• Nine of 11 S&P Sectors were positive in Tuesday’s session, led by financials, which went up 5.04%. Health care was the worst performer, down 0.19%. — Hayes

The market registered solid gains on Tuesday on hopes of a successful economic reopening and a potential coronavirus vaccine. The Dow Jones Industrial Average jumped more than 500 points, closing points below the 25,000 threshold. The 30-stock benchmark had crossed 25,000 during Tuesday’s session. The S&P 500 rose 1.1% to close around 2,991, after spending most of the day above the psychological 3,000 level. The Nasdaq Composite rose just 0.2%.– Li

The Trump administration is eyeing sanctions on Chinese officials, businesses and financial institutions over China’s move to crack down on Hong Kong, Bloomberg News reported Tuesday afternoon, citing people familiar with the matter. The potential actions could include freezing assets of Chinese officials and companies for implementing a national security law that will bypass the legislature in Hong Kong, Bloomberg News said, adding no decisions has been made yet. Stocks pared gains following the news in the final minutes of trading on Tuesday. –Li

The major averages were on pace to notch sharp gains with one hour left of trading amid optimism around the U.S. economy reopening along with mounting bets on a potential coronavirus vaccine. The Dow and S&P 500 traded at levels not seen since March, surging 2.7% and 1.8%, respectively. The Nasdaq Composite lagged with a 0.8% climb. —Imbert

The iShares MSCI Brazil ETF (EWZ) rallied more than 8% on Tuesday after data released by the country’s central bank showed a record current account surplus for April. Tuesday’s rally would be the ETF’s biggest since March 24, when it popped over 12%. To be sure, the EWZ is still down more than 40% year to date as Latin America’s biggest economy gets battered by the coronavirus pandemic. —Imbert, Francolla

Citigroup’s widely followed investor sentiment model is showing optimism at its highest level in a year. The firm’s strategists think that could be a mistake. The Panic/Euphoria model is registering much more of the latter after a two-month stock market rally off the March lows. As is common with sentiment indicators, they mostly work as contrarian signs. The indicator reached a “panic” low that coincided almost perfectly with the plunge to the March 23 bottom and was a great opportunity to buy. But the present “euphoria” level could be an opposite indicator. “We worry that investors are almost setting themselves up for a correction since there are too many unpredictable factors in play and thus the downside potential is not being priced correctly,” Citigroup Chief Equity Strategist Tobias Kevkovich said in a note. One danger point is when corporate officers a month from now start releasing their second-half outlooks, particularly if they say the rebound from the sharp coronavirus-induced downturn won’t be as sharp as stocks are indicating. “Chasing the market currently is a tad risky but we would be more intrigued with buying at lower levels,” Levkovich said last week. The firm has a 2,700 year-end price target for the S&P 500, pointing to an 8.6% downturn from Friday’s close. –Cox

With just a few trading days left in May, the month is shaping up to be a relatively calm one for stocks by recent standards. The range this month for the Dow has been roughly 2,400 points. This compares with 4,029 points in April, and 8,888 and 4,887 points in March and February, respectively. By historical standards, however, May’s 2,400-point move would be considered exceptional. In January, for instance, before Covid-19 lockdowns halted economies worldwide, the Dow traveled 1,204 points. –Hum, Stevens

JPMorgan Chase CEO Jamie Dimon said his company is “very valuable” at current stock price levels, sending the bank’s shares to their session highs. Dimon made his comment while responding to a question about JPMorgan’s valuation. Investors pay close attention when Dimon speaks about his bank’s valuation or makes changes to his JPMorgan holdings. In 2016, Dimon bought $26 million worth of JPMorgan shares at a time that proved close to the market bottom back then. “I’m not going to try to predict the bottom,” Dimon said, adding that “you cannot be a bank and be immune to what goes on in the world out there.”– Imbert, Son

An Apple representative told CNBC the tech giant is opening about 100 more stores in the United States this week, focusing on curbside service. The move, which includes locations in 21 states, will bring the total to 130 out of 271 U.S. Apple stores open by the end of the week. The company’s stock has risen 0.5% on Tuesday. —Leswing, Pound

The vaccine development company announced on Monday it would begin trials in Australia of its experimental coronavirus vaccine study known as “NVX-CoV2373.” Novavax has “rapidly advanced ‘2373 to become one of the leading vaccine candidates in clinical testing globally,” B Riley FBR analyst Mayank Mamtani said. Shares of the company are up 10% in midday Tuesday trading. —Bloom

• JPMorgan, Citigroup, Morgan Stanley — Shares of big banks jumped, making financials the best-performing sector among the 11 S&P 500 groupings on Tuesday. Banks had been one of the most beaten down sectors amid the coronvairus pandemic on profitability concerns and rising loan losses. However, now the hope of a successful economic reopening is overriding those worries, driving the shares higher.
• MGM Resorts, Las Vegas Sands, Wynn Resorts — Casino stocks soared on Tuesday amid optimism about a potential coronavirus vaccine and a faster economic recovery.
• Darden Restaurants — Shares of restaurant stocks rallied on Tuesday on hopes the economy reopening will bring consumers back to dining rooms. Olive Garden parent Darden Restaurants jumped more than 5%.

Click here for more. —Fitzgerald

Stocks could finish the year higher even after the market’s massive drop earlier in 2020, if history is any indication. Oppenheimer’s John Stoltzfus pointed out that, “even as drawdowns of 7% or more have occurred in 19 of the [past] 22 years, the S&P 500 has experienced a negative annual return in only six of those years.” The S&P 500 was down more than 30% from a Feb. 19 record before surging off those lows. —Imbert

The major averages traded sharply higher on Tuesday as investors added to bets for a potential coronavirus vaccine while cheering the reopening of the economy. The Dow jumped more than 600 points, or 2.5%, while the S&P 500 advanced 1.7%. Both the Dow and S&P 500 traded at their highest levels since March. — Imbert

Shares of big banks jumped on Tuesday, making financials the best-performing sector among the 11 S&P 500 groupings. JPMorgan popped 5%, while Citigroup jumped 9% and Morgan Stanley soared 7%. Banks had been one of the hardest-hit sectors amid the pandemic as investors feared the economic downturn would crush profitability and result in rising loan losses. But now the hope of a successful economic reopening is overriding those worries, pushing the sector higher. Investors also cheered strong home sales data on Tuesday, a sign that banks could see a rebound in profits with more loans and fees associated with the housing market. – Li

Merck announced on Tuesday morning that it has two potential Covid-19 vaccines that will begin human trials, and Cantor Fitzgerald believes the company’s expertise positions it well going forward. “We think that a key consideration for vaccine development will be companies’ capabilities around manufacturing and supply. In our view, MRK’s expertise and legacy in vaccines and anti-infectives gives it an advantage in identifying promising candidates/technologies, accelerating development efforts, and achieving scale,” the firm said. Shares of the company were up 2% in early trading. – Bloom

• UBS upgraded Southwest Airlines to buy from neutral.
• Wells Fargo upgraded Regeneron to overweight from equal weight.
• SunTrust upgraded Gilead to hold from sell.
• BMO upgraded Take-Two Interactive to outperform from market perform.
• UBS downgraded Halliburton to sell from neutral.
• Odeon Capital upgraded Goldman Sachs to buy from hold.
• Baird upgraded JB Hunt to outperform from neutral.
• Telsey upgraded Williams-Sonoma to outperform from market perform.
• Barclays initiated Lam Research as overweight.

CNBC PRO subscribers can read more here. – Bloom

New York Stock Exchange President Stacey Cunningham said on “Squawk on the Street” that she does not expect the protections put in place for workers at the exchange to prevent all infections.

In response to whether the floor of the NYSE would close again if a worker tested positive, Cunningham said the measures — which include temperature checks and mandatory mask-wearing — were designed to prevent outbreaks.

“It’s not designed to prevent an individual case. Somebody may be exposed outside of this building, show up here and we find out that they tested positive. The protections that we put in place have been designed to prevent an outbreak so that the likelihood of an infection passing around the floor is greatly diminished,” Cunningham said. –Pound

In yet another sign of economic recovery, new home sales rose 623,000 in April, compared with the expected 490,000, according to estimates from Dow Jones. Homebuilder stocks rallied on the data, with KB Home jumping more than 7%, while D.R. Horton and PulteGroup each traded more than 5% higher. – Stevens

As stocks soared on Tuesday, President Donald Trump took to twitter to comment on the move. “Stock Market up BIG, DOW crosses 25,000. S&P 500 over 3000,” he wrote about 15 minutes after the opening bell. Trump, who has been in favor of businesses getting back up and running, added that “states should open up ASAP.” “The Transition to Greatness has started, ahead of schedule. There will be ups and downs, but next year will be one of the best ever!” he said. –Stevens

About 15 stocks traded higher at the New York Stock Exchange for every decliner in early trading as the broader market rallied. Overall, more than 2,500 NYSE-listed stocks rose while just 192 declined, according to FactSet data. —Imbert

The New York Stock Exchange partially re-opened on Tuesday, after closing on March 23 amid the pandemic. Traders cheered as New York Governor Andrew Cuomo rang the opening bell ahead of his daily press briefing. The NYSE was closed for the longest period of time on record. — Fitzgerald

Department store chain Macy’s said in a memo for its new bond offering that it is seeing a stronger rebound in customers at its reopened stores than it had been anticipating. Macy’s reopened 68 stores on May 4 and is gradually opening others.

“We have seen greater demand than we expected, with demand averaging approximately 50% compared to 2019 levels. While we continue to work through our excess inventory, we expect that gross margins in fiscal 2020 relative to the prior fiscal year will be lowest in the second quarter, with sequential improvement going forward,” the memo said. Macy’s announced a $1.1 billion bond offering on Tuesday that the company said will be used to pay down its revolving credit facility. Shares rose 10% in early trading. — Pound

With Tuesday’s jump, a number of market milestones have been reached. – Stevens

• The Dow is back above 25,000
• The S&P 500 is back above 3,000
• The S&P 500 is above its 200-day moving average for first time since March 5
• Oil is on track for its best month on record

Home prices continue to increase at a modest rate across the U.S., even amid the coronavirus pandemic. Home prices in the U.S. increased by 4.4% in March, compared to a year prior, according to the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. This was an increase from the 4.2% rise in February of 2020. The 10-City Composite rose 3.4% annually, up from 3% in the previous month. The 20-City composite increased 3.9%, up from 3.5% in February. — Fitzgerald

Stocks began the holiday-shortened week on a high note, with gains right out of the gate on Tuesday. The Dow Jones Industrial Average rose 603 points, or 2.47%. Meanwhile the S&P 500 traded 2.17% higher, while the Nasdaq Composite was up 1.8%. All major averages are coming off a positive week — the Dow’s best since early April — as investors have cheered economies reopening, as well as a potential Covid-19 vaccine. – Stevens

Canaccord strategist Tony Dwyer expects a “relative bounce” in “value, banks and tanks (industrials)” as the economy continues to reopen. “The SPX has seen a historic move on the back of the mega-cap ‘COVID-19’ beneficiaries of the shelter-in-place policy for most of the country,” Dwyer wrote in a note. “As the economy accelerates the reopening and the financial conditions reverse their recent tightening, there is likely to be a shift into those areas that benefit from a broader and more vibrant recovery.” —Imbert, Bloom

Select traders and personnel returned to the New York Stock Exchange floor on Tuesday for the first time since March 23. There are slated to be about 80 floor brokers at the exchange, which is about 25% of the pre-pandemic level. NYSE President Stacey Cunningham said repeatedly during the intervening period that the floor would reopen as soon as it was safe to do so, arguing that the in-person experience made trading more efficient. — Pound, Pisani

West Texas Intermediate, the U.S. oil benchmark, is on track for its best month ever after an increase in demand as well as ongoing production cuts have lifted prices. WTI gained 79 cents on Tuesday, or 2.4%, to trade at $34.04 per barrel, bringing its month-to-date gain to more than 70%. International benchmark Brent crude rose 1.5% to trade at $36.06 per barrel. Still, WTI is well below its January high of $65.65 per barrel, and experts warn that factors including a second wave of coronavirus cases could prompt a return to historic lows. –Stevens

Shares of stocks positioned to benefit from the economy reopening rose in premarket trading on Tuesday. Airlines were a big winner with United Airlines jumped more than 7%. Delta and American Airlines rose more than 6%. Southwest rallied 6.5%, helped by an upgrade to buy at UBS. Cruise lines Carnival and Norwegian Cruise Line rose 9.3% and 8.8%, respectively. Retailers and restaurant companies also jumped, with hopes consumers will return to their stores and dining rooms. TJX Companies rose 2.3% and Nordstrom popped more than 3%. Darden Restaurants ticked nearly 4% higher. Casino stock MGM Resorts gained more than 7% before the bell. –Fitzgerald

Tuesday’s gains set up the S&P 500 on track to reach or break its 200-day moving average for the first time since March 5. S&P 500 futures implied a gain of more than 50 points at the open. That would put the broader-market index close to its 200-day average of 2,999.81. Breaking above that level could signal a change in the market’s long-term trend from bearish to bullish. —Imbert

Wall Street latched onto more positive news Tuesday on the coronavirus front, with progress made both on the reopening of several states and progress made towards a vaccine. On the medical front, Novamax said it has started a human study of its vaccine, while Merck added that it is in collaboration with scientific research organization IAVI to develop a potential vaccine. Testing also accelerated, with nearly 500,000 reported Monday and a new low of 3.8% positives, according to Tom Lee at Fundstrat. At the same time, New Jersey continued its steps forward, reopening its beaches over the Memorial Day weekend largely without incident. Overall, states that reopened prior to May 1 have seen a 29% reported drop in cases over the past three weeks. Futures popped on the combination of positive news and pointed to a 500-point in the Dow two hours before the market open. –Cox

Shares of Southwest jumped more than 6% during Tuesday’s premarket trading after UBS upgraded the stock to a buy rating. “We see a clearer path for domestic travel…and have started to see enough evidence of LUV’s cash burn reduction that some of the tail risk is removed,” the firm said. UBS also said that the company has the clearest balance sheet restoration and fundamental valuation among the group. The firm’s 12-month price target of $41 is about 42% above where the stock currently trades. Last week, Southwest said that new bookings began to outpace cancellations. Shares of the airline have dropped 46% this year. –Stevens

U.S. stock futures were sharply higher on Tuesday morning as traders grew more optimistic about the prospects of the economy successfully reopening and a potential coronavirus vaccine. Dow Jones Industrial Average futures traded about 500 points higher, or 2%. S&P 500 and Nasdaq 100 futures gained 1.8% and 1.6%, respectively. Stocks that would benefit from the reopening of the economy led the sharp gains. Carnival, MGM Resorts and United Airlines all rose at least 6.8%.

–With reporting by Jeff Cox, Jesse Pound, Michael Bloom, Yun Li, Bob Pisani, Kif Leswing, Hugh Son and Robert Hum.

Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.