Stocks Bounce After Monday’s Selloff

US stocks climbed higher on Tuesday, with the Morningstar US Market Index closing up 2.5%. The S&P 500 benchmark index also rose 2.5%, while the technology-heavy Nasdaq climbed 2.7%. The gains came after losses of 2.4% on Monday.

Among the major stocks moving were Nvidia NVDA, which climbed 2%, Netflix NFLX, which rose 5.3%, Palantir PLTR, which was up 3.5%, and Tesla TSLA, which rose 4.6% ahead of earnings.

Stocks rose across all nine Morningstar Style Boxes, with the biggest gains going to mid-cap growth stocks, which ended Tuesday up 3%, while large-cap value only rose 2%.

All 11 sectors rose, with financial services in the lead, closing up 3.3%, followed by consumer cyclicals, which rose 3.2%. Consumer defensives lagged, closing up only 1.6%.

Stocks have swung wildly since the beginning of April amid the fallout from the Trump administration’s announcement of sweeping new tariffs on major US trading partners. Many of those tariffs were altered or delayed in recent weeks, leaving investors struggling to adjust to a seemingly ever-changing outlook.

Adding to the anxiety over the past week are renewed tensions between the White House and Federal Reserve. President Trump has repeatedly called for lower interest rates and raised the possibility of removing Fed Chair Jerome Powell from his post before the end of Powell’s term next year. Analysts say that could dangerously destabilize global markets. Powell has been adamant that the central bank is not in a hurry to ease policy, especially while the outlook for inflation and growth remains fluid.

Gold prices hit a new record midday Tuesday, rising to above $3,500 an ounce amid all the uncertainty. As the day went on, prices fell back below $3,400 an ounce. Investors often treat gold as a hedge against economic downturns, geopolitical unease, or stubborn inflation.

Yields Remain High Despite Reduced Growth Forecasts

The yield on the 10-year US Treasury note held steady at 4.38% on Tuesday. Yields have ticked higher over the last few weeks despite concerns among investors that Trump’s policies will dent economic growth and stoke inflation.

On Tuesday, the IMF released new projections for global growth in 2025 and 2026, reducing its global forecast for this year to 2.8% growth, down from 3.3% in 2024. “Intensifying downside risks dominate the outlook, amid escalating trade tensions and financial market adjustments,” the organization wrote. “Divergent and swiftly changing policy positions or deteriorating sentiment could lead to even tighter global financial conditions.”