Stock Market Today: Why the Stock Market Is Rebounding; Dow, Nasdaq, S&P 500 Open Up; Japan's Nikkei Soars 10%; Palantir, Nvidia, Apple, More Movers; Recession Fears
S E E D E D C O N T E N T
The S&P 500 and Nasdaq are also rising
Aug. 6, 2024 at 9:48 AM EDT
Stocks are rebounding after the three main indexes suffered their worst day in more than a year.
In Tokyo, the benchmark Nikkei stock index closed 10% higher on Tuesday after falling more than 12% on Monday—its worst day since 'Black Monday' in 1987.
There's a lot going on behind these dramatic moves—fears of a U.S. recession, worries that artificial intelligence may be overhyped for technology stocks, concern that it's too late for Federal Reserve interest-rate cuts to help companies' earnings.
Bond yields moved a little higher. The rate on the benchmark 10-year U.S. Treasury bond was at 3.872%, while the yield on the 2-year note was at 4.002%.
Stocks Rise Slightly After Big Selloff
By
Connor Smith
The stock market was looking to mount a comeback after growing fears about an economic slowdown hammered the major U.S. indexes.
The Dow Jones Industrial Average was up just 28 points, or 0.1%, after falling more than a thousand points on Monday. The S&P 500 was up 0.3%. The Nasdaq Composite rose 0.4%.
The yield on the 2-year Treasury note was down to 3.936%. The yield on the 10-year Treasury note rose to 3.83%.
Stocks fell sharply on Monday as last week's selloff intensified. Traders were beginning to question rosy views of a "soft landing" where the economy avoids a pronounced downturn while the Federal Reserve conquers inflation. The recent economic data had some market participants questioning if Fed rate cuts in September would be too little, too late.
Global markets were also struggling. Japanese stocks, which fell on Monday, rebounded today. The price of the Japanese yen against the dollar soared, which likely led to an unwinding of the popular yen carry trade.
"Turn around Tuesday, or dead cat bounce?... For now we think the latter," writes Andrew Brenner, head of international fixed income at NatAlliance Securities. "We are only in the first week of the worst 2 month period of equities of the 12 months of the year."
U.S. Stocks Are Rebounding After Massive Selloff. Why It Could Be a Wild Ride.
By Brian Swint
Monday was a very bad day for stocks, especially in Japan. But traders seem able to swiftly shift gears—they're retracing much of the losses on Tuesday.
Futures for the three main U.S. indexes were marching higher after their worst day in more than a year. The Dow Jones Industrial Average added 274 points, or 0.6% in premarket trading. Futures for the S&P 500 gained 0.7%, while contracts tied to the tech-heavy Nasdaq Composite rose 0.8%. All three indexes fell about 3% on Monday.
In Tokyo, the benchmark Nikkei stock index gained 10% on Tuesday after falling more than 12% on Monday-its worst day since 'Black Monday' in 1987.
There's a lot going on behind these dramatic moves—fears of a U.S. recession, worries that artificial intelligence may be overhyped for technology stocks, concern that it's too late for Federal Reserve interest-rate cuts to help companies' earnings. Japan in particular was burdened by the unwinding of the carry trade, in which people borrow in yen to invest in higher-yield assets elsewhere. At the same time, the S&P is still up 15% over the past 12 months, and corrections are normal after long periods of gains.
"Investors shouldn't assume this relative calm means markets are back to behaving rationally again," said Matt Britzman, senior equity analyst at Hargreaves Lansdown. "The good news for longer-term investors is that no single piece of this puzzle warrants such a massive shift in sentiment, this looks to be more about a perfect storm of factors. Calmer waters should prevail."
Bond yields moved a little higher. The rate on the benchmark 10-year U.S. Treasury bond was at 3.872%, while the yield on the 2-year note was at 4.002%.
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Wow, had to dust that one off
Joe Biden is not responsible for the steep sell off yesterday, nor is he responsible for the rebound today. The experts apparently believe that his policies have led us to the brink of a recession.