Major equity benchmarks rebounded from the blood bath of the previous sessions as traders hoped the US would reach trade deals and lower duties.
At the time of writing, the Dow Jones Industrial Average was higher by 836 points after falling over 1,000 points at one point on Monday.
The S&P 500 index also gained ground and was up 2% from the previous close.
The Nasdaq Composite Index was also up more than 2% from Monday’s close.
The Dow and Russell 2000 each saw losses of 0.9% yesterday, the S&P dipped 0.2%, and the NASDAQ made a modest gain.
David Morrison, senior market analyst at Trade Nation, said:
But these numbers belie the panic and carnage that overtook the markets.
US President Donald Trump announced on Truth Social on Tuesday that he had a productive phone conversation with South Korea’s acting president and indicated that China is also eager to reach a deal.
This development follows a series of statements from White House officials indicating that the US is engaged in trade discussions with its trading partners.
CNBC reported Tuesday that Treasury Secretary Scott Bessent said around 70 countries had approached the US for tariff negotiations.
Bessent remarked that good deals could be reached if solid proposals were brought to the table but that some tariffs may remain as part of the final agreement.
Robert Ruggirello, chief investment officer at Brave Eagle Wealth Management, believes that while Tuesday’s gains were driven by growing optimism surrounding tariff negotiations, investors will require more consistent trade policies to sustain a market rebound.
“There has to be some staying power, something [where] corporations can make longer-term capital allocation decisions. They have to have confidence in a consistent policy,” Ruggirello told CNBC.
Apple shares surge
Bank of America analyst Wamsi Mohan views Apple’s falling stock price as an “enhanced buying opportunity for investors to own a high-quality name.”
Mohan explained that Apple shares have dropped approximately 25% this year, largely due to geopolitical uncertainty surrounding Trump’s tariffs and the postponement of AI-powered Siri features.
However, on Tuesday, Apple surged by 4% at one point.
The analyst informed clients in a Tuesday note that, typically, the tech company sees gains in the 12 months following an event that lowers its price-to-earnings ratio.
Mohan stated that the potential escalation of tariffs with China could be a more significant threat to Apple than Wall Street’s consensus estimates.
Apple can mitigate downside risk by taking measures such as shifting production to India, adjusting prices, modifying the pace of product releases, and optimising its supply chain.
Broadcom jumps
Broadcom shares rose 3% in premarket trading after the chipmaker announced authorization for a $10 billion share repurchase program through the end of the year.
CEO Hock Tan stated that the announcement “reflects the board’s confidence in the strength of Broadcom’s diversified semiconductor and infrastructure software product franchises.”
He emphasized the company’s unique position in mission-critical infrastructure software and its role in enabling hyperscalers to drive innovation in generative AI into their expanding subscriber platforms.
Healthcare stocks rise
The Trump administration’s plan to elevate Medicare insurers’ payment rates to 5.06% next year triggered a significant surge in the stock prices of major health insurance companies.
Humana experienced the most substantial increase, with its shares climbing by over 13%.
CVS Health and UnitedHealth also saw notable gains, with their stock prices rising by more than 7% and approximately 6%, respectively.
This market reaction underscores the potential financial impact of the proposed payment rate increase, which significantly exceeds the 2.23% increase put forward by the Biden administration.
The Wall Street Journal report that first disclosed the Trump administration’s plan was likely the primary catalyst for the stock market’s positive response.
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