Major U.S. stock indexes closed mostly higher Tuesday, erasing much of an early slide, as investors favored smaller, U.S.-focused companies for the second straight day.
Industrial, energy and health care stocks helped power the market higher. Banks also notched solid gains amid a broad pullback in demand for U.S. government bonds, which pushed yields higher. The yield on the 10-year Treasury note climbed to 1.73% from 1.62% late Monday, a big move.
Lenders rely on higher yields to set more lucrative interest rates on loans. Bank of America rose 2.5%, Goldman Sachs gained 1.7% and State Street vaulted 9%.
For the second day in a row, traders unloaded technology stocks and shares in companies that rely on consumer spending. Microsoft dropped 1.1%, as did payment processors Visa and Mastercard, losing 2.8% and 3.9%, respectively.
"It seems like a complete reversal of what's kind of been the theme over the last few months, where it's been more about higher quality, higher market cap, higher growth, more stable growth and lower volatility," said Sameer Samana of the Wells Fargo Investment Institute. "Things that had been doing well just completely got sold and the things that had been lagging completely got bought."
The S&P 500 index inched up 0.96 points, or less than 0.1%, to 2,979.39. The Dow Jones Industrial Average rose 73.92 points, or 0.3%, to 26,909.43. The average was briefly down 118 points.
The Nasdaq, which is heavily weighted with technology stocks, slid 3.28 points, or less than 0.1%, to 8,084.16.
Investors continued to flock to smaller-company stocks. They're seen as being better shielded from the fallout of the costly trade war between the U.S. and China than large multinationals.
Among the small-cap gainers were ABM Industries, which rose 3.1% and Spectrum Pharmaceuticals, which jumped 16.9%.
The Russell 2000 index of smaller-company stocks led the gainers, adding 18.76 points, or 1.2%, to 1,542.99.