US close: Stocks rebound from Monday's sell-off

dl nyse new york stock exchange new york city nyc wall street wall st nasdaq markets trading finance unsplash — Sharecast / David Vives via Unsplash

Wall Street stocks closed higher on Tuesday as major indices bounced back from heavy losses recorded across global markets a day earlier.

At the close, the Dow Jones Industrial Average was up 0.76% at 38,997.66, while the S&P 500 advanced 1.04% to 5,240.03 and the Nasdaq Composite saw out the session 1.03% firmer at 16,366.85.

The Dow closed 294.39 points higher on Tuesday, reclaiming some of the heavy losses recorded in the previous session.

The blue-chip Dow Jones shed more than 1,000 points on Monday, while the S&P 500 turned in its worst daily performance since 2022, with most market participants viewing the sell-off as being long overdue amidst high valuations and new records, with some analysts also warning that it may not be done just yet either.

Giving sentiment a boost on Tuesday, however, was a rebound in Japanese stocks, with the Nikkei 225 posting its best day since October 2008, surging 10.2%, following the benchmark's worst day since 1987, in which it closed 12.4% lower.

Comments from San Francisco Federal Reserve president Mary Daly late on Monday were also in focus after she said interest rate reductions were coming later in 2024 as she noted that she still believes the economy is growing, although the labour market was weakening and that less restrictive policy will be appropriate.

"Policy adjustments will be necessary in the coming quarter. How much that needs to be done and when it needs to take place, I think that’s going to depend a lot on the incoming information," she said. "I see an economy that has momentum, and we want to make sure we keep that."

In the corporate space, Uber beat Wall Street estimates with its latest set of quarterly results, aided by demand for both its ridesharing and food delivery services, while trade bellwether Caterpillar shares were in the green after the group posted another quarterly profit beat that helped offset revenues that fell short of estimates.

On the macro front, the US trade deficit narrowed in June, pulling back from its highest level in 20 months, according to the Bureau of Economic Analysis, but still came in above market forecasts. The goods and services trade balance was -$73.1bn, $1.9bn less than the revised -$75.0bn in May which was the highest deficit recorded since October 2022, the BEA reported on Tuesday. However, this was still slightly higher than the -$72.4bn consensus estimate.

Exports rose 1.5% or $3.9bn to $265.9bn, driven mainly by increased exports of aircraft and oil and gas, while imports rose 0.6% or $2.0bn to $339.0bn, with large increases in imports of pharmaceuticals.

Reporting by Iain Gilbert at Sharecast.com

Dow Jones - Risers

Dow Chemical Co. (DOW) $52.67 3.24%
Caterpillar Inc. (CAT) $326.89 3.18%
JP Morgan Chase & Co. (JPM) $200.88 3.07%
Goldman Sachs Group Inc. (GS) $471.41 2.70%
Walt Disney Co. (DIS) $90.13 2.68%
Microsoft Corp. (MSFT) $399.85 2.35%
American Express Co. (AXP) $231.06 2.28%
International Business Machines Corporation (CDI) (IBM) $187.26 2.15%
Nike Inc. (NKE) $72.62 1.68%
Walgreens Boots Alliance, Inc. (WBA) $10.98 1.53%