The S&P 500 and Nasdaq each rose 1.3% in morning trading and were on track to break a brutal three-day losing streak. The S&P 500 had tumbled more than 6% after several weaker-than-expected reports raised concerns that the Federal Reserve had pumped the brakes too much on the U.S. economy through high interest rates.
The Dow Jones Industrial Average was up 0.7%.
Elsewhere, Japan’s Nikkei 225 jumped 10.2% Tuesday, following its 12.4% sell-off the day before, which was its worst since 1987. Stocks in Tokyo rebounded as the value of the Japanese yen stabilized a bit against the U.S. dollar following several days of sharp gains.
A rate hike last week by the Bank of Japan contributed to the turmoil by upending trades where investors had borrowed Japanese yen at low cost and invested it elsewhere around the world. The resulting exits from those investments may have helped accelerate the declines in global markets.
Investors grew worried about a slowing U.S. economy. They pointed fingers at the Fed for waiting too long to cut rates and sold shares of technology companies that had ridden a frenzy around artificial intelligence to lofty stock market valuations.
Calmer voices that claimed the sell-off was a good thing because stock prices had risen too high seemed to prevail Tuesday. Some of Tuesday’s gainers were those same technology companies investors had fled from. Chipmaker Nvidia was up 3.8% Tuesday morning, following a drop of 6.4% on Monday.
For individual investors, experts say it’s not time for rash decisions, but a moment to make sure their investments are properly diversified.
Here’s a look at the reasons for the turbulence in markets:
INFLATION AND CENTRAL BANKS
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