U.S. stocks closed higher Tuesday, following a volatile session that saw major indexes fluctuate widely as investors digested a sharp move lower in the previous session and gauged the likelihood of both trade risk and further weakness in technology names.
The day’s gain returned the S&P 500 above a closely watched technical indicator, and brought the Nasdaq back into positive territory for the year. However, the rise only erased about half of Monday’s decline.
What did the main benchmarks do?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.80% rose 389.17 points, or 1.7%, to finish at 24,033.36. The S&P 500 /zigman2/quotes/210599714/realtime SPX -0.30% rose 32.57 points, or 1.3%, to end at 2,614.45 The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +0.64% added 71.16 points, or 1%, to close at 6,941.28. Both the S&P and the Nasdaq fell into negative territory multiple times throughout the session, with the indexes being led largely by moves in technology and internet names.
The day’s gains were broad, with all 11 S&P 500 sectors closing in positive territory and eight of them rising at least 1%. The top performer of the day was energy, which climbed 2.1% on the back of a 0.9% rise in the price of crude oil.
The day’s move was partially a reaction to Monday’s selloff, when the S&P and the Nasdaq shed more than 2% and the S&P closed below its 200-day moving average for the first time since the United Kingdom’s vote for Brexit in June 2016.
Volatility is expected to remain elevated, and President Donald Trump is a particular focus for the equity market, with investors wary of any trade actions he might announce — particularly after China retaliated to U.S. tariffs with protectionist measures of its own — as well as his grudge with Amazon, which he has repeatedly criticized over Twitter in the past week.
What’s driving markets
Tech stocks will likely remain on the radar, given they have been driving recent losses. Worries about Amazon.com Inc. /zigman2/quotes/210331248/composite AMZN +2.47% , given Trump’s attacks on the online retailer, could continue Tuesday after Vanity Fair reported that he’s seeking ways to damage the company. While Amazon is classified as a consumer-discretionary stock, it often moves on tech issues and it is part of the so-called group of “FAANG” names that drove markets higher in 2017 but have struggled more of late.
The trade situation, which has been knocking the stock market, should be another focus. China announced tariffs on about 130 U.S. goods over the weekend, in retaliation for the Trump administration’s planned tariffs on Chinese imports.
What strategists are saying
“This is still a market trading on fear instead of fundamentals and on tweets instead of technicals, which has made it frustratingly difficult to figure out where we’re headed in the near term,” said Andrew Adams, an investment strategist at Raymond James.