Rebounding from an historical eight-day decline, the Dow Jones Industrial Average stock market index gained over 150 points when consumer confidence hit a 16-year high and President Donald Trump signed an executive order revoking energy regulations.
The Dow gained 150.52 points on Tuesday, or 0.7 percent to reach 20,701.50 points after eight consecutive days of declines. The last time the Dow fell nine days in a row was in 1978.
The Dow ended its worst week in five months the day the GOP pulled its bill to repeal and replace Obamacare. Many on Wall Street saw the failure of the president’s first major legislative effort as an indication that Trump’s tax reform regulations and infrastructure could suffer the same fate.
Michael Block, chief market strategist at Rhino Trading, said the recent selloff was a “knee-jerk reaction” to the “shocking reality that President Trump can’t snap his fingers and get business and stock friendly policies enacted,” according to CNN.
Stocks initially soared after Trump was elected, as he promised “massive” tax cuts and reforms. And, despite the losses, the Dow still remains up 12 percent since the election, with the recent eight-day loss only lowering it by about 1.6 percent.
On Tuesday, US stocks bounced back after the Conference Board announced the consumer confidence index rose from 116.1 in February to 125.6 in March, its highest level since December 2000.
“[Consumers’] renewed optimism suggests the possibility of some upside to the prospects for economic growth in the coming months,” Lynn Franco, Director of Economic Indicators at The Conference Board said in the announcement.
According to the Conference Board data, Americans are more optimistic about the labor market, and the majority of consumers say that business conditions are good and that jobs are plentiful.
The gains in the market follow more than a week of declines after investors got spooked when Trump failed to garner enough votes to repeal and replace the Affordable Care Act in a Republican-controlled House.
Energy stocks also improved after Trump signed an executive order to promote energy independence and economic growth by revoking much of the Climate Change policies under former President Barack Obama.
The markets responded with the S&P 500 energy sector adding 1.3 percent, and major indices boosted by shares of energy companies.