Indexes jump as traders try to rebound from Monday’s losses

• U.S. stocks jumped Tuesday, rebounding from Monday’s sharp decline.

• The S&P 500 and Nasdaq 100 rose 1%, buoyed by investor concerns that a possible recession was easing.

• The CBOE Volatility Index fell 29%, indicating investors were buying the dip.

Investors were shocked Tuesday by the rebound in stocks after Monday’s sharp drop.

The S&P 500 and Nasdaq 100 jumped about 1% in Tuesday trading as investors wondered whether The unwinding of the yen carry trade was a short-term technical factor.

Concerns of imminent recession following Sahm rule’s triggering last week were rejected by the inventor of the rule, Former Fed official Claudia Sahm told Business Insider that the rising unemployment rate was due to an increase in labor supply rather than a decrease in labor demand.

“The American economy continues to grow. We continue to create jobs. We continue to spend even after inflation,” Sahm said.

Meanwhile, Wall Street strategists said the current decline in the stock market, with the S&P 500 down about 8% from its July record as of Monday, is completely normal.

“While such sharp declines in stock prices are concerning, a look at historical data for the S&P 500 reminds us that dips, pullbacks and corrections of 10% or more are a normal and healthy part of any bull market. On average, stocks experience a drawdown of more than 5% more than three times per year and a correction of 10% or more about once per year, even in positive years,” said George Smith, LPL portfolio strategist.

The CBOE Volatility Index, better known as the VIX, fell 29% on Tuesday, a drop that suggests investors are taking advantage of last week’s stock market declines to buy stocks.

Tuesday’s gains were broad-based, with four sectors posting gains of around 2% or more. Nvidia And Meta-platforms increased by about 4%, while Elie Lilly And Berkshire Hathaway jumped about 2%.

Goldman Sachs CEO David Solomon has dismissed the idea of ​​an emergency interest rate cut by the Federal Reserve because he doesn’t see an imminent recession on the agenda.

“I don’t expect you to see anything until September,” Salomon talked about a Fed interest rate cut. “The economy will continue to move forward and we probably won’t have a recession.”

Here’s where the U.S. indices stood at 4 p.m. Tuesday close:

The story continues

Here’s what else happened today:

In commodities, bonds and cryptocurrencies:

• West Texas Intermediate Crude oil rose 0.33% to $73.18 a barrel. Brent crude oilthe international benchmark, rose 0.21% to $76.46 a barrel.

• Gold was down 0.65% at $2,428.40 an ounce.

• The 10-year Treasury yield rose 9 basis points to 3.89%.

• Bitcoin jumped 4.80% to $56,626.

Read the original article on Business Insider