What happened

Shares of Wayfair (NYSE:W) were surging on Tuesday, as easing concerns about the economy's recovery from the effects of the COVID-19 coronavirus pandemic led investors to snap up shares of the online home-goods retailer.

As of 11:45 a.m. EDT, Wayfair's shares were up about 33.4% from Monday's closing price.

So what

Signs that Congress is close to a major stimulus deal drove the broader market up sharply on Tuesday morning. But Wayfair's gain was outpacing the market as of midday, likely for a couple of reasons.

A living room staged with Wayfair's furniture and home goods.

Image source: Wayfair.

For starters, while most retailers are carrying the weight of brick-and-mortar stores that have been shut down indefinitely during the pandemic, Wayfair -- a mostly online business (it has one retail store and one outlet store) -- has been able to continue operating.

Second, Wayfair's stock is a former highflier that has sunk dramatically since mid-February, when the company announced layoffs following the holiday shopping season. An earnings report in early March that highlighted slowing growth didn't help. 

As you can see, even with gains on Friday and Monday, the stock is still down by more than half since Feb. 1. 

W Chart

W data by YCharts.

Given the steep decline, it's no surprise to see a relatively big rebound now.

Now what

It's probably not reasonable for investors to expect full recovery to pre-pandemic levels anytime soon. In a note on Monday, Wells Fargo analyst Zachary Fadem cut his price target for Wayfair from $60 to $38.

That seemed like a prudent adjustment under the circumstances. But with a stock this volatile, it's hard to know for sure: As of late morning on Tuesday, Wayfair's shares were already above Fadem's new target.