In the trading day on Tuesday, stocks underwent a significant turnaround after facing early pressure. The major averages ended positively after managing to perform well above their lowest levels of the day.
At the close of trading, the major averages attained new session highs. Each increased, with the Dow ascending 320.33 points or 0.8 percent to 39,110.76, the S&P 500 rising 29.09 points or 0.6 percent to 5,178.51, and the Nasdaq going up 63.34 points or 0.4 percent to 16,166.79.
This turnaround can be partially attributed to a rebound by Nvidia. After a drop of as much as 3.9 percent earlier in the session, shares of Nvidia recovered, indicating a 1.1 percent increase on the day. This recovery came as traders absorbed recent news from the company's very first GTC Conference on Monday, where they unveiled their newest line of AI chips, known as Blackwell.
Meanwhile, traders eagerly anticipated the Federal Reserve's crucial monetary policy announcement on Wednesday. While the Fed is expected to keep interest rates steady, the accompanying statement and economic projections could have a meaningful impact on the rate outlook. The recent unexpectedly high inflation readings have diminished the hopes for the Fed's first rate decrease in June.
On the domestic economic front, new residential construction in the U.S. substantially rebounded in February, as per a report by the Commerce Department. It revealed a 10.7 percent upswing to an annual rate of 1.521 million, following a 12.3 percent downfall to 1.374 million in January, a revised rate.
Notably, oil service sector stocks made considerable gains in the session, contributing to a 2.2 percent ascent in the Philadelphia Oil Service Index. This was primarily due to an increase in crude oil price, with April delivery crude climbing $0.75 to $83.47 per barrel.
The notable upturn in housing starts similarly contributed to substantial gains in housing stocks, as indicated by a 1.7 percent increase in the Philadelphia Housing Sector Index. Steel, natural gas, and biotechnology stocks also observed significant gains.
Global stock markets portrayed a mixed performance on Tuesday. While Japan's Nikkei 225 Index rose by 0.7 percent, China's Shanghai Composite Index dropped by 0.7 percent. On the other hand, major European markets were on the rise during the session.
In light of the upcoming Fed's monetary policy announcement, Wednesday's trading activity might be somewhat subdued.
