Following significant declines in the previous session, Tuesday witnessed a robust recovery in stock markets, especially in the tech sector. The Nasdaq, with its tech-heavy composition, notably rebounded after suffering a sharp fall on Monday.
The Nasdaq surged by 391.75 points, marking a 2.0 percent gain, closing at 19,733.59, partially offsetting the prior 3.1 percent decline. The S&P 500 climbed 55.42 points or 0.9 percent to settle at 6,067.70, while the Dow saw an increase of 136.77 points or 0.3 percent to finish at 44,850.35.
This strength on Wall Street was driven by investors seeking to buy technology stocks at lower prices following Monday's downturn in the sector.
Nvidia (NVDA) shares experienced a remarkable recovery, ascending 8.8 percent, after a significant 17.0 percent drop in the prior session.
However, buying enthusiasm was somewhat tempered as investors looked forward to the Federal Reserve's upcoming monetary policy announcement on Wednesday.
While a majority anticipate the Fed will maintain interest rates at their current levels, attention will be focused on the accompanying statement for any indications of future rate trends.
Recent economic indicators have stoked concerns regarding the Fed's potential stance to keep rates unchanged for an extended period. Nevertheless, many economists foresee the central bank resuming rate cuts within the first half of the year.
CME Group's FedWatch Tool currently suggests a 74.5 percent probability of at least a quarter-point rate reduction following the Fed's June meeting.
In U.S. economic developments, the Commerce Department unexpectedly reported a significant decline in new orders for durable goods manufactured in the U.S. during December, chiefly due to a sharp drop in orders for transportation equipment.
The department announced that durable goods orders fell by 2.2 percent in December, following a revised 2.0 percent decrease in November.
Economists had anticipated a 0.8 percent rise in durable goods orders, in contrast to the previously reported 1.2 percent decline for the prior month.
Excluding transportation equipment, durable goods orders rose by 0.3 percent in December, following a 0.2 percent decrease in November. The forecast had projected a 0.4 percent increase in these orders.
Additionally, the Conference Board released data indicating a decline in its U.S. consumer confidence index, down to 104.1 in January from a significantly revised 109.5 in December.
Economists had expected the index to rise to 106.3, up from the initially reported 104.7 for the previous month.
Sector Highlights
Software stocks delivered some of the strongest performances of the day, driving a 3.0 percent rise in the Dow Jones U.S. Software Index.
Significant gains were also observed among brokerage stocks, evidenced by a 1.3 percent increase in the NYSE Arca Broker/Dealer Index.
Semiconductor and networking stocks also bounced back, whereas airline stocks experienced a notable downturn, bringing the NYSE Arca Airline Index down by 2.4 percent.
Weakness was evident in sectors such as oil production, commercial real estate, and pharmaceuticals, slightly counterbalancing the strength observed in other sectors.
Global Markets
In international markets, the Asia-Pacific region's equities mostly trended downward, exacerbated by holiday closures in several major markets. Japan's Nikkei 225 Index fell by 1.4 percent, and Australia's S&P/ASX 200 Index dipped by 0.1 percent.
European markets concluded the day with mixed results. The French CAC 40 Index decreased by 0.1 percent, while the U.K.'s FTSE 100 Index increased by 0.4 percent, and Germany's DAX Index rose by 0.7 percent.
In the bond markets, treasuries declined as investors anticipated the forthcoming Fed announcement. Consequently, the yield on the benchmark ten-year note increased by 2.3 basis points to 4.551 percent.
Outlook
Wednesday's early trading may see a cautious tone as investors await the Federal Reserve's afternoon monetary policy announcement.
