Wall Street rebounds after Trump-Powell shock; Tech leads recovery ahead of Tesla earnings

Wall Street found its footing on Tuesday, with stocks rebounding and bond markets stabilising after Monday's steep plunge triggered by renewed tensions between the White House and the Federal Reserve. The S&P 500 climbed 1.9%, while the Nasdaq 100 surged over 2%, driven by a rally in big-tech stocks as investors looked ahead to Tesla Inc.’s earnings later in the day.

Despite the relief rally, concerns over slowing global growth and policy uncertainty linger, keeping volatility elevated. The year-to-date selloff has been particularly harsh on tech firms, prompting options traders to increasingly seek downside protection.

The Dow Jones Industrial Average increased by 810 points (2.1%), while the S&P 500 and Nasdaq Composite both saw gains of 2.1% and 2.4%, respectively. Tesla shares rose by 4% prior to the release of the company's first-quarter report. Netflix experienced a 7% increase, with Meta and Amazon also seeing gains of 1% and 3%. Manufacturing conglomerate 3M saw an 8% rise in its stock price due to better-than-expected earnings, driving the Dow higher.

The S&P 500 Index climbed 1.7% in New York on Tuesday, while the Nasdaq 100 Index edged 2.0% higher, rallying from the previous day’s session which was heavily influenced by President Donald Trump’s call for Federal Reserve Chairman Jerome Powell to lower interest rates. The Cboe VIX Index hovered around 31.

The dollar remained steady after a gauge for the greenback fell to a 15-month low, though weakness is here to stay, Goldman Sachs said.

Futures markets reflected the shift in sentiment. Dow futures, which were down by 80 points early in the session, recovered strongly to show gains of nearly 350 points. The S&P 500 and Nasdaq futures also posted solid recoveries, up by 50 and 180 points, respectively.

The turnaround comes a day after markets were rattled by President Donald Trump’s public attack on Fed Chair Jerome Powell, demanding an unscheduled rate cut. The sharp remarks sent equities tumbling and sparked a rush into safe-haven assets, with gold hitting record highs.

While Tuesday's bounce offers short-term relief, investors remain cautious amid political tensions and global growth headwinds.