Global stocks experienced a rebound on Tuesday (August 6), following a significant sell-off the previous day that was triggered by fears of a potential U.S. recession. The Nikkei 225 in Tokyo saw a 10% rebound overnight, providing an initial sense of relief after the index’s 12.4% drop on Monday, its largest daily sell-off since the 1987 Black Monday crash.
In the U.S., the Dow Jones Industrial Average snapped a three-day losing streak, closing up 294 points. The S&P 500 closed the day ahead by 53 points after falling 3% on Monday, its sharpest daily decline since September 2022. The technology-heavy Nasdaq posted a similarly solid gain, closing 166 points in the black. Shares of the chip-making giant Nvidia, which tumbled as much as 10% on Monday, rose more than 6%. All of the major sectors in the S&P 500 were up, a reversal from broad-based declines on Monday.
“The statistics from yesterday’s sell-off had the feel of the ‘sell now, ask questions later’ kind of day where everything and anything is piling on to reasons for selling,” said Quincy Krosby, chief global strategist at LPL Financial, an investment adviser, per the New York Times.
In Europe, markets fluctuated between small gains and losses. The Stoxx 600 climbed 0.29%, while the U.K.’s FTSE 100 and Germany’s DAX indexes also posted gains.
Despite the rebound, the market remains volatile, and investors are closely watching for signs of a potential recession. Federal Reserve officials sought to reassure markets, with San Francisco Fed President Mary Daly saying it was “extremely important” to prevent the labor market tipping into a downturn. Daly said her mind was open to cutting interest rates as necessary and policy needed to be proactive.
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