At present, the factors that worry the market have not changed: inflation, the conflict between Russia and Ukraine, the epidemic. But on Tuesday, the US stock market saw its biggest one-day gain in more than a month, which may be a sign of a slight change in the psychological factors of investors.

On Tuesday, the S & P 500 closed up 1.6%, its biggest one-day gain since mid-MarchIt was also the second rise in seven trading days. The Russell 2000 index of small cap stocks was the strongest in April, up 2 per cent. At the same time, the economically sensitive sectors of the S & P 500, including consumer discretionary goods and real estate, performed well, with only the energy sector closing lower.

A series of unexpectedly strong economic data may be the real reason for the stock market rally, as it weakens talk of an impending recession.

For example, the latest data released on Tuesday showed better-than-expected housing starts in March, while other recent reports have also brought comfort to stock market bulls, including hiring data that remain strong and initial jobless claims near record lows. High-frequency data also show that American consumers' demand for shopping and dining out is picking up again.

Art Hogan, chief market strategist at National Securities, said:

"the housing starts data have become a catalyst for the oversold rebound that should have happened a long time ago, which is a healthy catalyst, with all the top seven sectors of the S & P 500 up more than 1%, which is clearly a fairly broad rally. "

Us housing starts surged in March to their highest level since 2006, according to specific data, indicating a strong performance in the housing sector, which is highly sensitive to changes in interest rates.

Meanwhile, initial jobless claims in the US have fallen in recent weeks, and the initial consumer confidence index released by the University of Michigan in early April rose to a three-month high.

High-frequency indicators showing consumer movements during the blockade also showed an upward trend. Among them, the barometer that represents a return to work has risen to its highest level since March 2020, while the US Transportation Security Administration (TSA) passenger throughput data and booking indicators measured by the restaurant reservation app OpenTable have also risen.

In addition, as can be seen from the results of the largest US banks, concerns about strong consumption may be wrong: data show that credit card spending surged in the first quarter as customers began to travel and dine again. And even if consumer spending has increased, the number of loans has not fallen.

The Hogan of National Securities says:

"I think the financial data that provide us with consumer health has changed the minds of a lot of people. This clearly shows that this is a strong and confident consumer environment, which clearly contributes to the psychology behind the market. "

So it can be seen clearly in the stock market on Tuesday.A basket of companies that have benefited from the economic recovery have performed better than those that have benefited from the epidemic dividend. Among them, shares of online trading platform Etsy surged nearly 4.4 per cent, while shares of gaming operator Payne National Lottery, Wynn Resort and used car retailer Chemex all rose more than 5 per cent.

In addition, some analysts believe that positive corporate earnings may also be one of the reasons for Tuesday's stock market rally.Before Tuesday's trading, Johnson & Johnson reported better-than-expected profits and announced an increase in dividend; IBM also reported Q1 results after trading, including revenue that beat analysts' expectations due to strong demand for hybrid cloud products.

In addition,Of the 49 companies in the s & p 500 that have reported results, 79.6% beat expectations, according to Rufter. In general, the percentage that exceeded expectations was 66%.

Mark Haefele, chief investment officer for global wealth management at UBS, said that despite the increased risks to economic growth, his basic view was that a recession would be avoided. He said corporate results were expected to be positive in the first quarter, adding that investors should focus on the long-term value of stocks. The chief investment officer wrote:

Periods of market volatility and increased uncertainty tend to provide an attractive long-term entry point for structural growth. "

He thinksIndustries such as 5G, automation, robotics and smart mobile are attractive.

JPMorgan Chase & Co strategist Marko Kolanovic also said that runaway commodity prices, different global central bank policies and the recent stock market sell-off created unique buying opportunities for growth and value stocks. The strategist said market sentiment and positions were still too pessimistic.

Recession fears have not completely subsided.

However, the market cannot interpret the trend of a single day too much, and investors and economists still have concerns about economic growth.. Lauren Goodwin, an economist and portfolio strategist at New York Life Investments, said that while it is reasonable to say that Tuesday's rise in the stock market, or the interest rate-sensitive real estate sector, may herald continued economic strength, it is too early to determine that the market is free of recession risk.

Goodwin said:

"if this is true, then we should expect what we have seen in the market, that is, when economic data are released, the market will fluctuate a lot, when the path of economic growth, especially when the path of future growth and interest rates is so uncertain, the day-to-day work of the Fed and investors will become more data-dependent than usual.

So if we see today's stock prices rebounding because of some positive economic data, and we remain pessimistic, we may move in the opposite direction. "