After beginning the week with a significant selloff, stocks regained most of their losses on Tuesday as the S&P 500 increased by 2.5%. This recovery was fueled by gains in prominent tech companies, including Apple, Amazon, and Meta.
The rally was partly prompted by comments made by Treasury Secretary Scott Bessent during a private investor summit hosted by JP Morgan in Washington, D.C. As initially reported by Bloomberg, Bessent indicated optimism about the de-escalation of the tariff situation with China, describing the continuing standoff as unsustainable.
Investors, who were eager for positive news following weeks of volatility, responded swiftly to the Bloomberg report, published midday, leading to a jump in stock prices, which had been steadily increasing throughout the morning.
Regarding the faltering dollar, while it is typical for investors to shift away from risky assets towards the U.S. dollar during periods of economic uncertainty—thereby strengthening its value—the opposite has occurred amid President Trump’s tariff conflict. Concerns over fluctuating U.S. government policies have weakened the dollar compared to other fiat currencies. However, on Tuesday, the dollar stabilized as the market rebounded. Bank of America’s latest Global Fund Manager Survey revealed that 61% of participants expected the dollar to decrease in value over the coming year.
Alternative investment options saw continued rallies. Bitcoin, which proponents argue can act as a hedge against government-backed assets, surpassed $90,000 on Tuesday for the first time in over a month. Some analysts contended it has become independent of traditional equity markets. Gold, traditionally seen by investors as a safe haven during market volatility, briefly exceeded $3,500 an ounce on Tuesday for the first time.
Despite Tuesday’s reprieve from the market downturn, bearish signals still loom, including President Trump’s threats to dismiss Federal Reserve chair Jerome Powell. On Monday, Bank of America Securities reduced its global economic growth forecast by 0.3%, partly attributing this to Trump’s erratic tariff strategy. Analysts noted an expectation of a significant slowdown but not a recession, placing the chance of a recession at 35%.
Meanwhile, the White House continues to claim that trade deals are nearing completion with partners like Japan and India, though the details remain uncertain. Politico reported on Tuesday that rather than complete trade agreements, these will likely be outlined as “memorandums of understanding,” with further negotiations anticipated to extend for months.
With the earnings season in full swing, market volatility is expected to persist. Tesla, led by Elon Musk, is set to release its first-quarter results on Tuesday evening following a nearly 15% drop in its stock price over the past month.
This article was originally published on Fortune.com.
