Stock Market News From Aug. 6, 2024: Why the Stock Market Rebounded; Dow, Nasdaq, S&P 500 Up; Japan's Nikkei Soars 10%; Palantir, Nvidia, Apple, More Movers; Recession Fears (2024)

What to Watch Today

In Tokyo, the benchmark Nikkei stock index closed 10% higher on Tuesday after falling more than 12% on Monday—its worst day since ‘Black Monday’ in 1987.

There’s a lot going on behind these dramatic moves—fears of a U.S. recession, worries that artificial intelligence may be overhyped for technology stocks, concern that it’s too late for Federal Reserve interest-rate cuts to help companies’ earnings.

Bonds yields rose, with the 10-year reaching 3.887% and the two-year up to 3.983%.

The stock market fumbled some earlier gains but the major indexes still closed higher after yesterday's selloff.

The Dow Jones Industrial Average rose 293 points, or 0.8%. The S&P 500 closed up 1%. The Nasdaq Composite was up 1%. The Russell 2000 was up 1%. The Dow was actually on track for its best day of the year before paring back some gains later in the afternoon.

The yield on the 2-year Treasury note rose to 3.983%. The 10-year yield was up to 3.887%.

A majority of S&P 500 stocks closed higher, while all 11 major sectors rose. After the Dow shed more than a thousand points on Monday, cooler heads prevailed today.

A rebound in Japan’s stock market set the tone earlier in the morning. Some market observers believed yesterday’s steep selloff was in part triggered by trading activity related to a rising Japanese yen.

That doesn’t mean signs of a slowing economy or worries about the Middle East are gone, but things were much calmer today. The CBOE Volatility Index, or VIX, was back down to about 25 after soaring as high as 65.73 on Monday.

August is a historically tough month for the stock market, so don’t be surprised if stocks struggle again this week. But market participants were likely encouraged to see some level of dip buying.

Crude oil futures rise for the first time in four sessions amid simmering Middle-East tensions and reports that Libya's national oil company is reducing production at the Sharara oil field due to protests.

Weekly U.S. inventory data is expected to show a sixth consecutive draw in crude oil stocks, according to a Wall Street Journal survey of analysts.

"Incredibly, crude oil has traded lower four weeks in a row despite the big storage draws, apparently dialing in on Chinese demand destruction and the possibility of OPEC+ increasing production later in the year," Mizuho's Robert Yawger says in a note.

WTI settles up 0.4% at $73.20 a barrel, and Brent edges up 0.2% to $76.48 a barrel.

What crash? The Dow was having its best day of the year as traders breathed a sigh of relief following yesterday's selloff.

The Dow was up 742 points, or 1.9%, which would be its largest percent gain since June 2023, according to Dow Jones Market Data. The S&P 500 was up 2.4%, which would be its best day since Nov. 30, 2022. The Nasdaq Composite was up 2.24%, which would be its best day since July 31.

The CBOE Volatility Index, or VIX, was down to 24.64, which signals heightened volatility in the market, but it’s far lower than the extreme volatility seen on Monday. The VIX soared as high as 65.73 as the major indexes swooned yesterday.

Today, the stock market was rallying across the board. While worries persist that the economy is showing signs of slowing, market participants seem to think yesterday’s stock market reaction to recent data was overblown.

The market is in the midst of a historically weak month, though, so expect a bumpy road ahead.