Stocks notched their biggest rally in five weeks as speculation the Federal Reserve will tighten policy at a gradual pace outweighed concern about the central bank’s hawkish pivot.
A relative sense of calm returned to markets, with risk assets rebounding after last week’s selloff. Energy, financial and industrial shares led gains in the S&P 500, while high-flying tech companies underperformed. A gauge of small caps climbed more than 2%. Amazon.com Inc. fell as the online retail giant kicked off its Prime Day sale, with merchants curbing discounts amid rising shipping costs. Treasuries and the dollar retreated. Bitcoin sank as China intensified its cryptocurrency crackdown.