1 of 2 | The S&P 500 traded 1.4% higher as Tuesday began while the Dow Jones Industrial Average rose 407 points, or a little more than 1%, as the Nasdaq Composite gained slightly over 1% on Tuesday. Photo by John Angelillo/UPI | License Photo
The global stock markets on Tuesday appeared to see rebounds after Monday’s dismal performance as fears of a U.S. recession were visible among some after a recent spat of bad economic data.
The S&P 500 traded 1.4% higher as the day began while the Dow Jones Industrial Average rose 407 points, or a little more than 1%, as the Nasdaq Composite gained slightly over 1% on Tuesday. Advertisement
The day before on Monday, Wall Street saw its worst day since 2022 and its worst August start in more than two decades as the Dow Jones Industrial Average plunged 1,034 points, the S&P 500 lost $1.3 trillion in market value and the Nasdaq Composite dropped 3.4% over fears of a U.S. recession.
Monday also marked the 15th time the Dow dropped more than 1,000 points in a single session, according to FactSet data.
Some large technology company stock also saw a slight rebound Tuesday. Nvidia rose 3.6% while Meta Platforms climbed 2.5%. However, Apple continued its decline by falling nearly 2%.
Overnight, Japan’s Nikkei stock index closed after seeing its largest known single-day point gain at more than 3,200 points. On Monday, the Nikkei suffered its worst day since 1987 by losing more than 12%. Advertisement
The 225-issue Nikkei Stock Average closed Tuesday at 3,217.04 points, or a little over 10%, from Monday, at 34,675.46, which exceeded the last day-on-day point gain record of 2,676.55 registered from October 1990.
The broader Topix index finished 207.06 points, or 9.30 percent, higher at 2,434.21.
In Britain, London’s FTSE opened Tuesday modestly higher at a 0.33% gain before dropping. Meanwhile, the French and German stock markets saw similar results with the Paris CAC-40 losing 1%.
August is known to historically be a rocky month for the stock market due to lighter trade volume, a financial expert notes.
Monday’s big sell-off arrived amid fears of a U.S. recession after Friday’s poor jobs report that showed the U.S. created 114,000 jobs for the month of July, far fewer than the expected 185,000 jobs. The unemployment rate also increased to 4.3%, which is its highest level since the COVID-19 pandemic, as the Federal Reserve considers cutting interest rates next month.
But while Monday’s sharp market sell-off was considered “quite normal,” what was not normal was the lack of volatility over the last few weeks, BMO Family Office chief investment officer Carol Schleif told CNBC.
As the market showed signs of recovery on Tuesday, Schleif advised investors to hold off for longer before increasing their equity exposure. Advertisement
“While the broader stock market is on the brink of entering correction territory, it’s typically wise to let a bit of dust settle before putting new money to work as there is risk of catching a falling knife during a correction,” Schleif advised.
“We would characterize the recent market pullback as a textbook correction, after months of low volatility so far in 2024.”
