Wall Street’s main indexes have bounced back from a heavy selloff, led by technology stocks, on hopes of the US opening up for negotiations on its aggressive tariffs.
Most megacap and growth stocks gained, with Nvidia and Meta Platforms adding 5 per cent each and Tesla rising 4 per cent.
The technology sector rose 3.5 per cent, while indexes tracking banks and semiconductor stocks were up 4 per cent and 3.6 per cent, respectively.
The CBOE Volatility index – seen as Wall Street’s ‘fear gauge’ – retreated to 38.59 points after rising on Monday to its highest level since August last year.
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The small-cap Russell 2000 index was trading 2.5 per cent higher after three sessions of heavy losses.
“While today’s market bounce offers some relief, trade tensions remain the elephant in the room,” said Lukman Otunuga, senior market analyst at FXTM.
“With Trump threatening a further 50 per cent tariff on China and Beijing refusing to back down, sentiment could turn quickly.”
At 9.35am eastern time, the Dow Jones Industrial Average rose 3.11 per cent; the S&P 500 gained 3.16 per cent; and the Nasdaq Composite gained 3.65 per cent.
[ China vows to ‘fight to the end’ in tariff war with USOpens in new window ]
Since the reciprocal tariff announcement on April 2nd, concerns over a global trade war and fears of a recession in the US have gripped Wall Street, with the three major indexes hitting around one-year lows.
The Nasdaq confirmed a bear market on Friday, while the S&P 500 and the Dow are down more than 15 per cent from their record-high closes.
Uncertainty lingered after China said it will never accept the “blackmail nature” of the US to Trump’s threat to ratchet up tariffs on Chinese imports to more than 100 per cent.
US Treasury Secretary Scott Bessent said in an interview to CNBC on Tuesday tariff negotiations are the result of calls from other countries, not sliding financial markets, and China’s escalation is a big mistake.
Meanwhile, Trump said he discussed tariffs, among others, in a “great” call with acting South Korean President Han Duck-soo.
Worries that the aggressive US tariffs could spur inflation and hamper global growth have led to greater pricing of interest-rate cuts by the Federal Reserve.
Traders see more than 96 basis points of easing by the December, implying three fully priced in 25-bps cuts and a 84 per cent chance of a fourth such a reduction, according to LSEG data.
A consumer price inflation reading is also due on Thursday, which could offer more clues on the inflation trajectory.
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Among individual stocks, chipmaker Broadcom advanced 7.4 per cent after the company said it was launching a new share buyback program of up to $10 billion.
Health insurer UnitedHealth Group gained 7.6 per cent after the US announced 5.06 per cent increase in payment rates to private insurers for 2026 Medicare Advantage health plans.
Humana soared 11.7 per cent, while Elevance Health also gained 6.5 per cent. CVS Health jumped 8.4 per cent. The insurer named UPS executive Brian Newman as its chief financial officer.
Advancing issues outnumbered decliners by a 13.36-to-1 ratio on the NYSE and by a 6.33-to-1 ratio on the Nasdaq.
The S&P 500 posted no new 52-week highs and no new lows, while the Nasdaq Composite recorded nine new highs and 24 new lows.
Earlier, Asia stocks bounced off 1½ year lows, while European shares opened broadly higher.
The blue-chip FTSE 100 rose 1.4 per cent after falling for four consecutive sessions.
The domestically focused midcap index also gained 2.5 per cent, after hitting its lowest point since November 2023 in the previous session.
Japan’s blue-chip Nikkei stock index closed 6 per cent higher, with Treasury Secretary Scott Bessent tasked with leading trade negotiations with Tokyo. – Reuters
