Wall Street stocks rebounded on Tuesday, August 6, after enduring three consecutive days of losses. Analysts attributed the recovery to bargain hunting and a positive shift in the US bond markets. These gains in New York followed a relatively quiet day in most overseas stock markets. The Dow Jones Industrial Average closed up 294.39 points, or 0.8 percent, settling at 38,997.66. The broad-based S&P 500 gained 53.70 points, or 1 percent, reaching 5,240.03, while the tech-rich Nasdaq Composite Index also advanced 166.77 points, or 1 percent, to 16,366.85.
Federal Reserve policymakers on Monday, August 5, countered the idea that the weaker-than-expected July jobs data signaled an economic downturn. “I’m hopeful that we’ll get some stability back,” said Jack Ablin of Cresset Capital, adding that there could still be “a little more downside risks to the market.” “The question investors are grappling with is whether we’re hitting an economic air pocket or whether it’s a head fake … It was a single monthly jobs report so you’d want to be careful about reading too much into it,” said Scott Helfstein, head of investment strategy at Global X.
Several companies made notable moves within the market. Kenvue, the company behind brands like Tylenol and Band-Aids, saw a 14.7 percent jump after reporting stronger-than-expected profits, attributed partly to higher prices for its products. Uber surged 10.9 percent as it announced increased profits on a 16 percent rise in revenues to $10.7 billion. Company officials attributed this success to strong demand from frequent users. Caterpillar also experienced a gain of 3.0 percent after reporting better-than-expected profits, with strong pricing offsetting the impact of lower revenues.
The turnaround in the US equity market coincided with a climb in US Treasury bond yields and a decrease in a closely-watched volatility index. The yield on benchmark US 10-year notes rose 12 basis points to 3.903 percent, up from 3.783 percent late on Monday. The 30-year bond yield also climbed, increasing 12.1 basis points to 4.1924 percent. Notably, the 2-year note yield, often linked to interest rate expectations, rose 10.9 basis points to 3.9936 percent from 3.885 percent late on Monday. These movements in Treasury yields suggest a more optimistic view of the economic outlook, contributing to the overall rebound in the stock market.
