The Dow Jones Industrial Average rose 586 points as U.S. markets rallied after losses in response to the Federal Reserve changing its interest rate policy last week. Photo by John Angelillo/UPI | License Photo
June 21 (UPI) -- U.S. markets rebounded on Monday after investors were spooked by a change in Federal Reserve policy last week.
The Dow Jones Industrial Average gained 586.89 points, or 1.76%, while the S&P 500 rose 1.4% to within 1% of its record high and the Nasdaq Composite gained 0.8%.
The blue-chip Dow was coming off of its worst week since October after the Federal Reserve on Wednesday said it planned to make two interest rate increases by the end of 2023, altering its course from a March announcement when it said interest rates would remain near zero until 2024.
The Dow fell 3.5% last week, while the S&P 500 declined 1.9% and the Nasdaq dropped 0.2%.
Analysts on Monday said the bounceback could indicate that market reaction to the Fed's decision was overblown.
"I think it took a weekend's pause to realize the world wasn't coming to an end," Michael Farr of Washington, D.C.-based investment advisory firm Farr, Miller and Washington, told The Washington Post. "We are coming to the end of the second quarter with stellar year-to-date returns, a docile Fed, low interest rates, and an economy that is emerging from shutdown. It all bodes well for a fairly bullish stock market."
Commodity stocks, which suffered amid the selloff last week bounced back as Devon Energy rose 6.92% and Occidental Petroleum gained 5.39%, while the S&P 500's energy sector gained 4.3%.
Markets tied to the widespread lifting of COVID-19 restrictions also received a boost Monday as Norwegian Cruise stock gained 3.56% and Boeing stock climbed 3.34%.
Some major tech stocks turned in losses to hold back the Nasdaq as chipmaker Nvidia dropped 1.13%, Amazon fell 0.94%, Netflix declined 0.75% and Tesla slid 0.4%.