A broad rally sent the S&P 500 and Dow Jones industrial averages to record highs on Tuesday, with a sharp rebound in crude prices boosting energy shares, while the Nasdaq turned positive for the year. The S&P added to the record high set Monday and the Dow also set a new closing high. The Nasdaq closed at its highest since late December.

The economy likely expanded at a 2.3 percent annualized rate in the second quarter following the latest data on wholesale trade, the Atlanta Federal Reserve’s GDPNow forecast model showed on Tuesday. The latest GDP estimate was slightly lower than the 2.4 percent figure calculated on July 6, the regional Fed said on its website.

Cyclical sectors like technology, materials and energy posted the largest gains on the S&P, backed by the view that the economy, despite a slow start to the year, is on solid footing. Cyclicals are seen taking the lead in stocks for the rest of the year after utilities, telecoms and consumer staples led the way in the first half.

Earnings of S&P 500 companies are estimated to have fallen 5 percent in the second quarter, matching the drop in the first three months of the year, but a typical number of profit beats would leave the first quarter as the bottom of the earnings contraction.

Alcoa cemented those hopes for better earnings as its profit and sales both beat market expectations. The stock closed up 5.4 percent at $10.69, the highest in over two months.

Energy was the best performing sector in the S&P Tuesday with a 2.25-percent advance on the back of nearly 5-percent gains in crude futures prices.

Behind the broad stocks’ rally is also the expectation that central banks in most developed economies will continue to keep interest rates at rock bottom levels – if not negative – for the foreseeable future.

In the latest such development, a gloomy inflation assessment from the Japanese government was seen as adding pressure on the Bank of Japan to expand stimulus this month as it struggles to fend off deflationary risks.

Among the 10 major S&P sectors, the traditionally defensive utilities, telecoms and consumer staples fell. The three indexes have posted double-digit percentage gains so far this year.

United Continental rose 8.8 percent after saying its quarterly passenger unit revenue would drop less than expected. The outlook also boosted other airlines and an industry index rose 4.6 percent.

Seagate closed up 21.8 percent to $29.35 on strong preliminary results. Rival Western Digital rose 4.8 percent to 51.84.

Approximately 7.6 billion shares changed hands on the major domestic equity exchanges, a number that was below the 7.81 billion daily average over the past 20 sessions.

IMF ‘Negligible’ Brexit Impact on U.S. Growth

Britain’s vote to leave the European Union has caused uncertainty and increased risks to our economy but thus far it looks likely to have a pretty “negligible” impact on our growth, the International Monetary Fund said on Tuesday.

The IMF said in its formal annual review of the U.S. economy and policies that the June 23 “Brexit” vote has prompted a rise in the dollar that has been less than feared, up about 1 percent in nominal effective terms, while stock markets have recovered losses incurred right after the vote. Meanwhile, a safe-haven rush into U.S. Treasuries has lowered yields, and home and business financing costs, considerably.

“The net effect on growth is pretty negligible,” Nigel Chalk, the IMF’s mission chief for the United States, told reporters on a conference call.

The IMF kept unchanged its previous U.S. economic growth forecasts of 2.2 percent for 2016 and 2.5 percent in 2017, issued a day before the British referendum.

While financial market volatility or a further rise in the dollar’s value represent downside risks, the IMF saw upside risks from oil prices, including a delayed positive effect on consumption and a lessening drag from reduced oil-related investment.

However, the IMF said a “more complex and harmful” downside risk is that the potential growth rate may be lower than previously estimated, with a smaller output gap. It said growth in future years under this scenario could settle at well below 2 percent.

“If true, this would mean the U.S. economy could soon bump up against capacity constraints that would slow growth and generate domestic inflationary pressures with negative global spillovers,” the IMF said in its report.

The IMF staff report said the United States faces a confluence of forces that will weigh on future gains, including a rising share of the U.S. labor force shifting into retirement, aging basic infrastructure, low productivity gains and labor markets and businesses that appear less adept at reallocating human and physical capital.

The IMF board of directors stressed the need for Washington to take broad range of measures to tackle longer-term challenges, including boosting federal infrastructure spending and reaching agreement on skills-based immigration reform.

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