• U.S. stocks jumped on Tuesday, recovering from Monday’s sharp decline.

• The S&P 500 and Nasdaq 100 rose 1%, driven by investors’ fears that a possible recession is waning.

• The CBOE volatility index fell 29%, suggesting that investors were buying on dips.

Investors were shocked on Tuesday as stock prices rebounded after Monday’s sharp decline.

The S&P 500 and Nasdaq 100 rose about 1 percent in trading on Tuesday as investors grappled with whether the unwinding of the yen carry trade was a short-term technical factor.

Concerns about a looming recession following the introduction of the Sahm rule last week were dismissed by the rule’s creator, former Fed official Claudia Sahm, who told Business Insider that the rise in the unemployment rate was due to an increase in labor supply rather than a decrease in labor demand.

“The U.S. economy is still growing. We are still creating new jobs. And we are spending money even after accounting for inflation,” Sahm said.

Meanwhile, Wall Street strategists said the current decline in the stock market – the S&P 500 has lost about 8 percent since its July record high on Monday – was completely normal.

“While such sharp declines are concerning, a look at historical data on the S&P 500 index reminds us that dips, pullbacks and corrections of 10% or more are a normal and healthy part of a bull market. On average, stocks experience a decline of over 5% more than three times a year and a correction of 10% or more about once a year – even in positive years,” said George Smith, portfolio strategist at LPL.

The CBOE Volatility Index, better known as VIX, plunged 29 percent on Tuesday, a decline that suggests investors are using last week’s stock market decline as an opportunity to buy stocks.

Gains on Tuesday were broad-based, with four sectors posting gains of about 2% or more. Shares of Nvidia and Meta Platforms rose about 4%, while Eli Lilly and Berkshire Hathaway rose about 2%.

Goldman Sachs CEO David Solomon rejected the idea of ​​an emergency rate cut by the Federal Reserve because he does not believe a recession is imminent.

“I don’t expect anything to happen before September,” Solomon said of a Fed rate cut. “The economy will continue to run and we probably won’t see a recession.”

Here you can see the US indices at the close of trading on Tuesday at 4:00 p.m.:

The story goes on

Here’s what else happened today:

For commodities, bonds and cryptocurrencies:

• West Texas Intermediate crude oil rose 0.33 percent to $73.18 per barrel. Brent crude oil, the international reference price, rose 0.21 percent to $76.46 per barrel.

• Gold prices fell 0.65% to $2,428.40 per ounce.

• The yield on 10-year government bonds rose 9 basis points to 3.89%.

• The Bitcoin price rose 4.80% to $56,626.

Read the original article on Business Insider