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 DJIA, +1.65% rose 389.17 points, or 1.7%, to finish at 24,033.36. The S&P 500 SPX, +1.26% rose 32.57 points, or 1.3%, to end at 2,614.45 The Nasdaq Composite Index COMP, +1.04% 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.
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What’s driving markets
Tech stocks will likely remain on the radar, given they have been driving recent losses. Worries about Amazon.com Inc. AMZN, +1.46% 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.
Read: Facebook is in bear market territory, Apple is in a correction, and they are far from alone
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.
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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.
“There’s just not much positive news to help balance out the daily onslaught of fear-producing headlines about trade wars and tech crises, especially since we are currently in between earnings seasons.”
Read: Data, earnings set to wrest stock market’s attention from Facebook and trade
Which stocks are in focus?
The “FAANG” names — in addition to Amazon, this group includes Facebook FB, +0.46% , Apple AAPL, +1.03% , Netflix NFLX, +1.21% and Google-parent Alphabet GOOGL, +0.60% GOOG, +0.69% — were in focus after their sharp losses Monday.
Amazon closed up 1.5%, but trading was volatile after the latest in a series of Trump tweets against the company.
I am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy. Amazon should pay these costs (plus) and not have them bourne by the American Taxpayer. Many billions of dollars. P.O. leaders don’t have a clue (or do they?)!
— Donald J. Trump (@realDonaldTrump) April 3, 2018
Netflix gained 1.2%. Alphabet rose 0.6% and Apple added 1%. Facebook rose 0.5% after previously having fallen as much as 2%.
Read: Facebook is in bear-market territory as Apple flirts with a correction, and they are far from alone
Tesla Inc. TSLA, +5.96% rose 6% after releasing first-quarter production data, which addressed concerns over its ability to turn out as many Model 3 sedans as it has promised.
General Motors Co. GM, +3.30% rose 3.3% after reporting its March sales figures. It also said it would cease to report monthly sales in the future. Ford Motor Co. F, +2.67% rose 2.7% after reporting its own March sales.
Walmart Inc. WMT, +1.46% rose 1.5% after CNBC reported the retailer is in talks to buy online pharmacy startup PillPack. That comes days after Walmart was reported to be in early talks to buy Humana Inc. HUM, +0.63% .
21st Century Fox Inc. FOX, -0.25% fell 0.3% after the media company proposed separating Sky News from the rest of Sky PLC SKY, +2.12% to allay U.K. regulators’ concerns its bid to acquire the 61% of Sky it doesn’t already own. Fox also said Walt Disney Co. DIS, +0.77% has expressed interest in buying Sky News.
Spotify Technology Inc. SPOT, +12.89% fell 10% in its trading debut, following its direct listing.
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What are other markets doing?
Asian stock markets NIK, -0.45% HSI, +0.29% closed lower, as tech stocks tracked U.S. losses Monday.European stocks SXXP, -0.49% SXXP, -0.49% also fell, as traders returned from a long holiday weekend.
Oil prices CLK8, +0.11% were modestly higher, while gold futures GCJ8, -0.05% slipped and the ICE U.S. Dollar Index DXY, -0.07% DXY, -0.07% clung to a thin gain.