Traders work on the floor of the New York Stock Exchange during morning trading on August 6, 2024 in New York City.
Michael M. Santiago | Getty Images
Stocks jumped on Tuesday, recouping some of the losses from the previous three days, as investors put recession fears behind them and Japanese shares rose.
the Standard & Poor's 500 It traded 2.4% higher. Dow Jones Industrial Average The Standard & Poor's 500 index rose about 716 points, or 1.9%, … Nasdaq Composite It increased by 2.5%.
All 11 sectors in the broad market index posted positive performance on the day, with the technology sector up about 2%. Several large-cap tech stocks also rebounded after a sharp decline on Monday. Nvidia It increased by 6%, while Meta platforms Advance more than 5%.
Helping boost sentiment was a rebound in Japanese stocks. Nikkei 225 Index The Nasdaq Dubai index posted its best day since October 2008, rising 10.2%. The rise comes a day after the benchmark index posted its worst day since 1987, losing 12.4%.
Volatility is likely to remain elevated in the near term as the carry trade continues to ease, said Ross Mayfield, investment strategist at Baird.
“I wouldn't be surprised if we see more pressure in the coming weeks, but I think the concerns about growth are overblown,” Mayfield said.
The labor market remains relatively healthy despite some slowdown, Mayfield added, and other economic indicators still look strong. “While I think market volatility could continue, I’m less concerned about the underlying fundamentals,” he said.
The moves come after a sharp sell-off on Monday amid concerns about the state of the economy. The Dow Jones Industrial Average fell 1,033.99 points, or 2.6%, while the S&P 500 fell 3%. Both indexes had their worst session since September 2022. The Nasdaq Composite lost 3.4%.
The sharp decline in the yen’s “carry trade” has also contributed to the volatility. Last week, the Bank of Japan raised interest rates, which helped the yen rise. That has affected traders’ practice of borrowing the cheaper currency to buy other global assets. However, the yen retreated on Tuesday following sharp gains that added to concerns about the carry trade.
