Оn Tuesday bank stocks jumped as Treasury yields rose on strong U.S. economic data. Retail sales rose 0.6% last month, whereas the expected increase was only 0.4%, import prices also rebounded raising 0.1% after two months of declines, CNBC reports.
The SPDR S&P Bank exchange-traded fund (ARCA: KBE) gained 0.8%, the Empire State manufacturing index jumped to 25.2 in August from just 9.8 in the previous month.
"The economic data is very supportive for the market. This is a very good cross-current for a market that's looking for a new catalyst,” said chief market strategist at Wunderlich Securities Art Hogan.
On Monday the S&P 500 index (INDEX: SPX), Nasdaq 100 and Dow Jones industrial average rose solidly gaining more than 1% as investors started to return to riskier assets from gold after U.S. and North Korea tensions eased, Reuters reported. The S&P financial sector rose 1.60%, technology index jumped up 1.39%, Dow Jones — 0.66% up, Nasdaq Composite also gained 1.21%.
"As long as the economic expansion continues, the markets are likely to recover from geopolitical related volatility," Jason Pride, director of investment strategy at Glenmede, said in a note. "This 8 year bull market has coincided with geopolitical events such as the Arab Spring, fears of a European Union breakup, annexation of Crimea and the Greek Debt Crisis. Conversely, some geopolitical events can have prolonged negative effects on the market; the key is to assess the probability of economic impact of each event," Pride added.