Wall Street rebounded strongly on Monday (Tuesday AEST), reversing steep losses from the prior session as investors shook off concerns over the United States economy and trade policy.
The Dow Jones Industrial Average jumped 585.1 points, or 1.3% to close at 44,173.6, wiping out Friday’s losses in full. The S&P 500 rose 91.3 points or 1.5% to 6,329.9, breaking a four-day losing streak and recording its best day since May. The Nasdaq Composite led gains, surging 403.5 points or 2% surge to finish at 21,053.6.
Investor sentiment recovered after Friday’s sharp declines, which were triggered by a weaker-than-expected jobs report and escalating trade tensions.
President Donald Trump’s executive order last week imposed revised “reciprocal” tariffs on dozens of U.S. trading partners, including countries like Syria and Taiwan. The new duties range from 10% to 41%, raising fresh concerns about global trade friction.
Stocks had also been rattled by revisions to May and June employment figures. Following the report’s release, President Trump dismissed the head of the Bureau of Labor Statistics, saying he would name a new commissioner in the coming days.
Among individual stocks, Berkshire Hathaway fell 2.7% after Warren Buffett’s conglomerate reported a drop in operating earnings. The firm has been scaling back its equity holdings and has paused its share buyback program.
Figma plunged 27.4%, erasing part of last week’s massive IPO gains. The design software firm had more than tripled in value on debut last Thursday and gained an additional 5% on Friday.
In contrast, American Eagle Outfitters jumped nearly 23.7% after Trump praised the company’s controversial campaign with actress Sydney Sweeney, calling it the “'HOTTEST' ad out there”. The retailer has faced criticism over the campaign, which some have labelled sexist and tone-deaf.
Looking ahead, market participants are focusing on U.S.–China trade developments after last week’s high-level meetings in Stockholm. Treasury Secretary Scott Bessent expressed optimism during an interview with CNBC, stating, “we have the makings of a deal”.
Earnings season continues this week, with Palantir reporting results after Monday’s close, with AMD set to follow on Tuesday.
On the bond market, 10-year rates were down 0.5% to 4.194%, and 2-year yields were stable at 3.679%.
