NEW YORK — Major stock markets jumped on Tuesday after three days of heavy selling, while U.S. Treasury yields rose for a second day as investors were optimistic that Washington might be willing to negotiate on some of its aggressive tariffs.
The Nasdaq led gains on Wall Street and was up more than 4% early, while technology led sector gains on the S&P 500 and a semiconductor index was up more than 5%.
Oil prices rebounded as well, helping lift energy shares.
“This appears to be an oversold rally” in stocks, said Adam Sarhan, chief executive of 50 Park Investments in New York.
“The question is, has anything changed? The tariffs are obviously the driver here … Any de-escalation on the tariff front would be a welcome sign for investors.”
Stocks had fallen sharply following President Donald Trump’s unveiling late last Wednesday of sweeping tariffs as worries mounted that a global trade war would push the economy into recession.
Trump said Japan is sending a team to negotiate on trade. His decision to impose a 25% levy on auto imports and a reciprocal 24% tariff on other Japanese goods is expected to deal a huge blow to Japan’s export-heavy economy.
The Japanese prime minister said he told Trump in a telephone call that his tariff policies are extremely disappointing and urged him to rethink.
Trump also said he discussed tariffs, shipbuilding and potential energy deals in a “great” call with acting South Korean President Han Duck-soo.
The Dow Jones Industrial Average rose 1,397.02 points, or 3.68%, to 39,361.01, the S&P 500 rose 190.80 points, or 3.77%, to 5,253.05 and the Nasdaq Composite rose 663.10 points, or 4.24%, to 16,265.27.
Investors are looking ahead to the start of U.S. quarterly earnings reports this week. Sarhan said upbeat results could potentially be a catalyst to lift stocks further.
MSCI’s gauge of stocks across the globe rose 25.38 points, or 3.40%, to 770.86. The pan-European STOXX 600 index rose 3.69%.
Japan’s blue-chip Nikkei stock index closed 6% higher.
U.S. Treasury yields jumped for the second day on greater optimism that Trump will strike deals with trading partners, while the dollar, which has taken a beating from the tariff turmoil, remained weak against other major currencies.
Benchmark 10-year note yields were last up 8.6 basis points on the day at 4.243%. They fell to 3.86% on Friday, the lowest since October 4.
Interest-rate sensitive two-year yields rose 10.5 basis points to 3.844%. They had reached 3.435% on Monday, the lowest since September 2022.
The dollar index, which measures the greenback against a basket of currencies, including the yen and the euro, fell 0.09% to 103.34, with the euro down 0.01% at $1.0903. Against the Japanese yen, the dollar weakened 0.22% to 147.53.
The heightened uncertainty in markets wasn’t helped by shifting headlines on trade as investors looked for respite from the sharp market volatility.
Trump on Monday also dug in his heels over China, vowing additional 50% levies if Beijing does not withdraw retaliatory tariffs on the United States. Beijing said on Tuesday it will never accept the “blackmail nature” of U.S. tariff threats.
The dollar strengthened 0.39% to 7.373 versus the offshore Chinese yuan.
U.S. crude rose 1.17% to $61.42 a barrel and Brent rose to $64.83 per barrel, up 0.95% on the day.
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