Wall Street has ended higher, led by a surge in the Dow Jones Industrial Average, as investors bought energy and materials stocks and looked beyond a recent surge in coronavirus cases.

The S&P 500 energy, materials, industrial, health and consumer staples indexes have all jumped.

Limiting gains in the Nasdaq and S&P 500, Amazon lost ground, extending a rotation that began on Monday out of many big-name technology and momentum stocks that have led much of the US stock market’s rebound since March.

Bob Shea, chief executive officer at TrimTabs Asset Management in New York, said the rise in energy stocks had not been expected.

“Today is counterintuitive. We are reading about California’s economy shutting down and a record spike in cases in Florida, and yet you have energy stocks leading,” he said.

“We’re seeing a mini-rotation into value.”

JPMorgan Chase, the largest US lender, rose after it posted a smaller-than-expected 51 per cent drop in second-quarter profit.

Wells Fargo tumbled after booking a quarterly loss for the first time since the 2008 financial crisis.

Citigroup dropped 3.6 per cent on Tuesday as it reported a steep fall in quarterly profit.

The S&P 500 banks index dropped as the three banks set aside a combined $US28 billion to cover potential losses on loans to borrowers hurt by the coronavirus pandemic.

Wall Street has reclaimed most of its coronavirus-driven losses since March as a raft of monetary and fiscal stimulus and upbeat economic data raised hopes of a swift post-pandemic recovery.

But a recent record surge in COVID-19 cases and new business restrictions, particularly in California, has again raised uncertainty about how long it may take for the economy to recover.

Alabama, Florida and North Carolina reported record daily increases in COVID-19 deaths on Tuesday.

Investors are bracing for what could be the sharpest drop in quarterly earnings for S&P 500 firms since the 2008 financial crisis, according to Refinitiv IBES data.

Unofficially, the Dow Jones Industrial Average rose 557.51 points, or 2.14 per cent, to 26,643.31, the S&P 500 gained 42.37 points, or 1.34 per cent, to 3,197.59 and the Nasdaq Composite added 97.73 points, or 0.94 per cent, to 10,488.58.

Delta Air Lines dropped after it warned it will be more than two years before the industry sees a sustainable recovery from the “staggering” impact of the coronavirus pandemic, with demand largely tracking the curve of infections in different places.

Moderna jumped after it said it plans to start a late-stage clinical trial for its COVID-19 vaccine candidate on or around July 27.