US stocks surged in a broad-based rally as investors assessed the earnings outlook and speculation grew that markets were on the verge of bottoming out.
The S&P 500 defied the late-day reversal that has been a hallmark of this volatile market, closing near session highs and posting its biggest one-day gain since June 24th as all 11 industry groups advanced. The tech-heavy NASDAQ 100 outperformed major benchmarks, finishing 3.1% higher, with megacaps Apple and Google recouping losses from Monday.
With the possibility of earnings disappointment baked into markets, any positive surprises may result in outsized gains. According to the latest Bank of America Monthly Fund Manager Survey, investors are on high alert for signs that high inflation and monetary tightening are squeezing consumers and employment, with allocation to stocks plunging to levels last seen in October 2008 and exposure to cash surging to the highest since 2001.