The S&P 500 rose by 0.7% on Tuesday, recovering from a previous losing session, while the Nasdaq climbed 1.2%, and the Dow Jones increased by 45 points. This improvement came as traders watched oil prices and bond yields.
Oil prices, which had risen earlier in the week, fell by 4% on Tuesday as traders followed developments in the Middle East, where tensions between Israel and Iran continue, and the U.S. is trying to prevent a broader conflict.
Technology stocks helped boost the market, with Nvidia and Apple seeing gains of 4% and over 1%, respectively. Meta, Tesla, and Microsoft also rose by at least 1%.
Market Faces Uncertainty as War Concerns and Potential Tax Changes Loom Ahead of U.S. Elections
Robert Pavlik from Dakota Wealth Management explained that while the ongoing war is a major concern, there are also uncertainties about the upcoming U.S. elections and how potential tax changes could affect future earnings.
“The war seems to be on the forefront of everybody’s mind,” said Robert Pavlik, senior portfolio manager at Dakota Wealth Management.
Bigger picture is the election and there are a lot of uncertainties revolving around taxes and how that’s going to impact earnings potentially going forward.”
Robert Pavlik
Market Volatility Surges Amid Middle East Tensions and Rising Yields, Fed Rate Cut Concerns Grow
This month, stock markets have been volatile due to worries about the Middle East conflict and rising bond yields. The 10-year Treasury yield reached its highest point since August 1st on Tuesday.
Although the market saw some gains last week after a strong jobs report, investor confidence dropped on Monday. Concerns grew that the Federal Reserve might slow down future interest rate cuts because of the continued strength in the labor market.
Pavlik added that recent economic data suggests the economy is still strong, which could cause the Federal Reserve to take more time before reducing rates further.
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