Wall St bounces back after selloff as investors assess earnings

NEW YORK: Wall Street’s main indexes rebounded on Tuesday from a steep selloff in the previous session sparked by President Donald Trump’s mounting criticism of Federal Reserve Chair Jerome Powell, as market focus shifted to corporate results.

Some optimism on US trade negotiations also helped indexes hit session highs after a report that US Treasury Secretary Scott Bessent had said a tariff standoff with China was unsustainable, and that he expects the situation to de-escalate.

Investors sifted through a slew of quarterly earnings, with dozens more due through the week, for indications on how companies are navigating the uncertainty caused by tariffs and a potential hit to future earnings.

Earnings were a mixed bag on the day. Shares of industrial conglomerate 3M Co MMM.N, the biggest gainer on the blue-chip Dow, jumped 6.9 per cent after the company beat first-quarter profit expectations.

On the other hand, Northrop Grumman slumped 11.75 per cent after reporting a sharp drop in profit, while RTX 8.9 per cent after the company flagged a potential hit of about $850 million to its annual profit from the tariffs.

The overall mood remained fragile as investors awaited Trump’s next move in his relentless tussle with Powell over interest rates, fueling concerns about the central bank’s autonomy and the future monetary policy path.

Wall Street was down more than 2 per cent on Monday as Trump doubled down against the Fed chair.

“Right now, it is that normal bounce after drops,” said Ryan Dykmans, chief investment officer at Dunham & Associates Investment Counsel.

“I’m actually putting a little more credibility on the drops than the bounce… there is still a lot of uncertainty here and that doesn’t really bode well for the market in (the) short term.”

While the S&P 500 recovered the ground it had lost on Monday, it is yet to recoup declines since the April 2 “Liberation Day” tariff announcement and is more than 14 per cent below its February 19 record closing high.

At 11:49 am ET, the Dow Jones Industrial Average rose 754.87 points, or 1.98 per cent, to 38,925.28, the S&P 500 gained 97.99 points, or 1.90 per cent, to 5,256.19, and the Nasdaq Composite gained 332.19 points, or 2.09 per cent, to 16,203.09.

Megacaps also recovered, with Nvidia NVDA.O rising 1.9 per cent and Apple up 2.8 per cent.

All sectors on the S&P 500 rose, with consumer discretionary leading gains.

Tesla, which will kick off earnings for the “Magnificent Seven” megacap stocks after markets close, jumped 5.2 per cent.

The economic outlook, however, remains uncertain. The International Monetary Fund slashed its forecasts for growth in the US on Tuesday to 1.8 per cent in 2025, while Citigroup said the US economy has a 40 per cent to 45 per cent chance of falling into a recession.

Commentary from several Fed speakers is expected through the dayand their remarks will be parsed for clues on the central bank’s policy outlook and view on rising tensions with the White House.

Wall St futures edge up, dollar steadies, gold touches new record

Advancing issues outnumbered decliners by a 6.28-to-1 ratio on the NYSE, and a 3.73-to-1 ratio on the Nasdaq.

The S&P 500 posted four new 52-week highs and one new low, while the Nasdaq Composite recorded 24 new highs and 61 new lows.