US stocks staged a powerful comeback Tuesday as Wall Street rebounded from one of the most dramatic sell-offs of the year, driven by fresh volatility from Donald Trump’s renewed push for Fed rate cuts. Dow futures surged over 230 points before the open, and by mid-morning, the Dow, S&P 500, and Nasdaq had each gained roughly 1.3% as investors snapped up battered shares across tech, industrials, and defensive sectors.
This upswing offers a brief but crucial reprieve for traders after Monday’s rout, when Trump’s sharp criticism of Fed Chair Jerome Powell and escalating calls for lower interest rates triggered the fourth straight losing session for the major indices. The Dow cratered more than 970 points Monday, the S&P 500 slid 2.3%, and the Nasdaq fell 2.5%, shaking traders’ confidence and reviving fears about the central bank’s independence and its ability to manage inflation and trade headwinds effectively.
The rebound has immediate relevance for stock market participants. For short-term traders, Tuesday’s sharp gains present a window to capture profits from oversold levels. Big Tech, which led Monday’s sell-off, bounced back early, with Tesla, Apple, Amazon, Microsoft, Nvidia, Alphabet, and Meta Platforms all recovering. Tesla’s earnings after the bell are especially significant: with the stock down 44% year-to-date on growth worries, options traders and equity holders are bracing for sharp post-market moves based on the company’s outlook and CEO Elon Musk’s handling of trade and political distractions.
Elsewhere, gold prices surged above $3,500 an ounce—an all-time high—as nervous traders sought safety, underscoring ongoing caution despite the equity rally. Treasury yields edged lower, reflecting bond investors’ continued anxiety over Fed policy and looming recession risk, even as equities recovered. Bitcoin jumped above $88,500, further highlighting the trend of investors rotating into alternative assets when traditional markets face turbulence.
Earnings season also injected fresh volatility. While GE Aerospace and 3M saw their shares rise on solid results, Kimberly-Clark lowered its profit outlook, and Verizon tumbled after reporting steeper-than-expected subscriber losses. Investors are dissecting these reports for clues about consumer health, corporate margin pressures, and sector leadership amid uncertain macro conditions.
Global markets reflected this uncertainty. European stocks fell after a long holiday, with the healthcare sector notably weak, and the International Monetary Fund warned that escalating trade wars could deliver long-lasting hits to both the U.S. and Chinese economies.
For traders and investors, today’s action is a reminder that this market is being driven as much by headlines and policy maneuvers as by fundamentals. Trump’s ability to sway sentiment—and potentially Fed policy—means rate expectations remain a key risk factor, as do trade and tariff shocks. As Wall Street tracks every development from Washington to the earnings podium, nimble positioning and disciplined risk management remain vital. Today’s bounce is a breather, but the volatility under the surface means opportunities—and risks—are multiplying for market participants in real time.
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