It didn’t take much, just some early reports of a strong holiday season for retailers and reassuring murmurs from Washington and Moscow, to put Wall Street in a brighter frame of mind.
Stocks were poised to break their losing streak on Wednesday, as sales data showed spending by American consumers remains healthy and Russia signaled that it was willing to help keep oil prices higher. Investors were also reassured by a White House official’s statement that Jerome H. Powell’s job as Federal Reserve chairman was “100 percent” safe.
The gains brought the S & P 500-stock index back from the brink of a bear market — a decline of 20 percent from its peak — though 2018 remains on track to be the benchmark’s worst year since the global financial crisis a decade ago.
The market’s rally was broad. Retail stocks led the gains after data from Mastercard showed that retail sales in the United States this holiday season were 5.1 percent higher than last year, their most robust growth in six years. Kohl’s was among the best-performing stocks in the S & P 500, climbing more than 8 percent. Shares in Amazon, which described the holiday season as “record breaking” without offering details, rose almost 7 percent.
Even bank stocks, which have taken the brunt of recent selling as worries grew that the United States economy was weakening, rose significantly. Shares of Wells Fargo were up 2.4 percent and shares of Bank of America up 4 percent.
It was a market move that finally made sense, at least to some traders.
“Fundamentally you’ve got good growth here in the States, you have reasonable growth overseas, you’re going to have record earnings in 2019 and possibly in 2020 as well, you’ve got low inflation,” said Scott Wren, senior global equity strategist at the Wells Fargo Investment Institute. He said the market, before Wednesday’s steep rise, had fallen too far and was ready to post gains as a result of the underlying strength of the American economy.
Oil prices, too, were on the move after Russia’s energy minister, Alexander Novak, told a Russian newspaper that the country would benefit from continuing to cooperate with the Organization of the Petroleum Exporting Countries on regulating prices. American crude, the benchmark oil price, rose more than 8 percent.
White House officials continued to try to calm a run of market volatility, insisting again on Wednesday that President Trump had no plans to fire Mr. Powell despite the president’s criticism of the Fed policies. Mr. Trump, who previously sought to hitch his political success to a rising stock market, has blamed the Fed’s interest rate increases for the downturn on Wall Street.
[Read more about how Mr. Trump has become fixated on Mr. Powell and has asked aides whether he has the power to fire him.]
Kevin Hassett, the chairman of the Council of Economic Advisers, told reporters Wednesday morning that Mr. Powell’s job was “100 percent” safe. He echoed remarks by Treasury Secretary Steven Mnuchin and Mick Mulvaney, Mr. Trump’s incoming chief of staff, both of whom spent the weekend trying to persuade investors that the president did not plan to fire Mr. Powell. Those efforts mostly backfired, in part because Mr. Trump continued to criticize his handpicked Fed chairman.
Worries about the White House’s response to the meltdown in the financial markets have dovetailed with other concerns — including weakness in global trade and the economic impact of a potentially long government shutdown — to feed the volatility on Wall Street.
Before trading started on Wednesday, the S & P 500 had fallen 19.7 percent from its peak on Sept. 20. A bear market is defined as a drop of at least 20 percent.
Despite the rally, some market analysts were sounding notes of caution. A primary concern among stock investors lately has been that rising interest rates could hurt the economy in the future. Higher interest rates on bonds or even savings accounts also make stock investments less appealing.
“The Fed is making a monumental mistake,” said Barry Bannister, the head of institutional equity strategy at the broker Stifel. “They do not realize how long and by how much they’ve tightened already, and until they back off, the market’s going to have a very weak floor under it.”