The New York Stock Exchange, captured in a photo by Michael Nagle for Bloomberg.
After a turbulent start to the week, Wall Street made a strong comeback on Tuesday, wiping out Monday’s steep losses. A calmer mood returned to the financial markets as major U.S. indexes posted notable gains. The S&P 500 jumped 2.5%, while the Dow Jones surged over 1,000 points, and the Nasdaq rose by 2.7%. These increases marked a full recovery from Monday’s sell-off.
The earlier drop had been fueled by growing unease over President Donald Trump’s ongoing trade conflicts and his public criticism of the Federal Reserve. But Tuesday’s rally reflected a renewed sense of stability. The U.S. dollar, which had weakened against other currencies, steadied. Treasury yields also levelled off after Monday’s sharp rise, calming concerns that investors were losing faith in America’s financial strength.
While experts aren't making firm predictions, many believe markets will continue to swing based on Trump's trade negotiations. If new agreements aren’t reached quickly, there’s concern that the economy might slow down or even tip into a recession.
Adding to the day’s financial outlook was a revised report from the International Monetary Fund, which cut its 2025 global growth forecast to 2.8%, down from 3.3%. Despite this cautious update, U.S. Vice President JD Vance reported progress in trade discussions with India’s Prime Minister Narendra Modi, which boosted optimism.
Another reason for Tuesday’s rally was a wave of strong earnings reports from big-name companies.
Credit reporting agency Equifax led the way, soaring nearly 14% after posting better-than-expected profits. The company also announced a generous plan to buy back $3 billion of its own stock and raise dividends, a clear sign of confidence.
3M, the maker of Scotch tape and Command strips, gained over 8%. It reported improved profit margins and reaffirmed its full-year outlook, though it warned tariffs might slightly reduce its per-share earnings.
Homebuilder PulteGroup also saw an 8.4% rise in its stock. Lower mortgage rates, triggered by earlier dips in bond yields, helped the company appeal to homebuyers even as affordability challenges remain.
Tesla gained 4.6% ahead of its earnings report. Though the company has had a rough year—down 41% so far due to a 13% drop in vehicle sales and public backlash over Elon Musk’s leadership, it remains closely watched by investors.
The market also revealed winners and losers from ongoing tariff policies. First Solar rose 10.5% after the U.S. confirmed tougher-than-expected tariffs on certain solar products from Southeast Asia. In contrast, defence giant RTX saw its stock fall nearly 10% after warning that new tariffs could reduce profits by $850 million this year, despite a solid quarterly performance.
Kimberly-Clark, the maker of Huggies and Kleenex, also dropped 1.6%, even after surpassing earnings expectations. The company lowered its profit outlook, citing increased supply chain costs.
Still, these losses were rare. About 99% of the S&P 500’s stocks ended the day higher, with the index closing at 5,287.76. The Dow finished at 39,186.98, and the Nasdaq closed at 16,300.42. The 10-year Treasury yield dipped slightly to 4.39% in the bond market, a drop from Monday’s 4.42%.
Most European markets rose, following mild and mixed trading in Asia.
