Wall Street Rebounds After Selloff, VIX Falls, Dollar Surges Against Yen: What's Driving Markets Tuesday?

U.S. stock markets saw a strong recovery on Tuesday, with both the S&P 500 and the Nasdaq 100 climbing over 2%, nearly offsetting Monday’s losses. Investors took advantage of recent volatility to buy the dip, showing continued confidence in the U.S. economy’s ability to avoid a recession.

Gains were observed in both small-cap and blue-chip stocks, reflecting broad improvement in market sentiment.

The CBOE Volatility Index (VIX), often referred to as the market’s fear gauge, decreased by almost 40% on Tuesday after spiking 65% on Monday.

According to the FedWatch Tool, the likelihood of a 50-basis-point interest rate cut decreased to 90% Monday to 64% Tuesday.

As traders reassess Fed rate cuts, Treasury yields increased during the day, with the 10-year yield rising by 11 basis points to 3.9% and the two-year yield climbing 9 basis points to 4.01%.

The rebound of the U.S. dollar was supported by rising yields and diminished expectations of a larger Federal Reserve rate cut in September. The dollar increased by 0.8% against the low-yielding Japanese yen, breaking a streak of five consecutive days of losses.

In terms of macroeconomic data, the day was relatively quiet, with only June’s trade figures making news. The U.S. trade deficit narrowed to $73.1 billion in June 2024 from a revised 20-month high of $75 billion in May, slightly above market forecasts of a $72.5-billion gap. Exports increased by 1.5% to $265.9 billion, the second-highest on record, while imports grew by a more modest 0.6% to $339 billion.

Gold and oil prices both decreased by 0.7% and 0.8%, respectively, marking their fourth consecutive session of declines.

Bitcoin BTC/USD rebounded by 4.9% after experiencing a 7% drop on Monday.

Tuesday’s Performance In Major US Indices, ETFs

Major Indices	Price	1-day %chg
Nasdaq 100	18,312.03	2.3%
S&P 500	5,295.41	2.1%
Russell 2000	2,081.01	1.9%
Dow Jones	39,301.11	1.5%

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust SPY was trading 2.2% higher to $528.42.
• The SPDR Dow Jones Industrial Average DIA rose 1.7% to $393.21.
• The tech-heavy Invesco QQQ Trust Series QQQ rose 2.4% to $445.63.
• The iShares Russell 2000 ETF IWM rose 1.9% to $206.06.
• All 11 sectors of the S&P 500 saw gains, with the Technology Select Sector SPDR Fund XLK leading the way, increasing by 3.1%. The Health Care Select Sector SPDR Fund XLV witnessed the smallest gain, up 1.4%.

Tuesday’s Stock Movers

• Nvidia Corp. NVDA rallied over 6%, snapping three straight session of losses.
• Meta Platforms Inc. META soared over 5%, marking its best one-day surge in a month.

Stocks reacting to company earnings included:

• ADTRAN Holdings, Inc. ADTN, down by nearly 18%,
• Caterpillar, Inc. CAT, up 3.8%,
• Constellation Energy Corporation CEG, up 6.9%,
• CSX Corp. CSX, up 3.7%,
• Duke Energy Corporation DUK, up 2.3%,
• Expeditors International of Washington, Inc. EXPD, down 4.4%,
• Fox Corporation FOXA, up 6.7%,
• GLOBALFOUNDRIES Inc. GFS, down 1%,
• Hyatt Hotels Corporation H, down 0.7%,
• Lucid Group, Inc. LCID up 9%,
• Molson Coors Beverage Company TAP, up 6.8%,
• Palantir Technologies Inc. PLTR up 12.3%,
• Uber Technologies, Inc. UBER, up 11%
• Teradata Corporation TDC down about 14%,
• WK Kellogg Co KLG down 6.7%,
• Yum! Brands, Inc. YUM up 3.7%,
• ZoomInfo Technologies Inc. ZI, down nearly 19%.

Companies reporting after the close are Airbnb, Inc. ABNB, Coupang, Inc. CPNG, Devon Energy Corporation DVN, Amgen, Inc. AMGN, Cirrus Logic, Inc. CRUS, Exelixis, Inc. EXEL, Fortinet, Inc. FTNT, GoPro, Inc. GPRO, Illumina, Inc. ILMN, Jack in the Box Inc. JACK, IAC Inc. IAC, Tripadvisor, Inc. TRIP, Reddit, Inc. RDDT, Rivian Automotive, Inc. RIVN, Sunrun Inc. RUN, Wynn Resorts, Limited WYNN and Super Micro Computer, Inc. SMCI.

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