U.S. stocks open higher on Tuesday, with Dow up 0.37%, Nasdaq up 0.49%, and S&P 500 up 0.48%

U.S. stocks open higher on Tuesday, with Dow up 0.37%, Nasdaq up 0.49%, and S&P 500 up 0.48%

The U.S. stock market experienced a positive turnaround on Tuesday, with all three major indexes closing higher. The Dow Jones Industrial Average (DJIA) gained 0.83%, the S&P 500 set a new record by closing 0.56% higher, and the Nasdaq Composite advanced 0.39%.

The Federal Reserve's two-day policy meeting, which kicked off on Tuesday, was a significant focus for investors. Although the central bank is anticipated to keep interest rates unchanged on Wednesday, concerns regarding rising inflation have left some investors anxious about the potential for higher rates for an extended period.

Dow Jones Industrial Average (DJIA)

The DJIA had its best day since February 22, rising 320.33 points or 0.83% to close at 39,110.76. The 30-stock benchmark's gains were driven by notable performances from Nvidia and Super Micro Computer.

Nvidia, a prominent chipmaker, experienced a slight recovery, climbing roughly 1.1% after reporting on its first-ever GTC Conference. During the event, CEO Jensen Huang unveiled the company's latest artificial intelligence chip, Blackwell, which is considered a more powerful successor to its existing chips. Super Micro Computer, a primary vendor for building out Nvidia's AI servers, experienced a decline of about 9% due to a share offering.

S&P 500

The S&P 500 gained 0.56% to close at a new record of 5,178.51. The index's gains were broad-based, with 10 of its 11 sectors experiencing positive performance. The defensive sectors of utilities and real estate were the only exceptions.

Nasdaq Composite

The tech-heavy Nasdaq Composite advanced 0.39% to finish at 16,166.79. Despite the overall market rebound, the Nasdaq continued its streak of declines, marking its sixth straight session of losses. The index has shed 5.1% over the past five trading days, marking its biggest five-day drop since December 2022.

Overall Market Conditions

According to Sam Stovall, chief investment strategist at CFRA Research, the recent market correction may continue for longer than some investors anticipate, with potentially deeper declines than expected. However, Stovall also noted that the ongoing AI revolution has a long way to go, and the recent decline in the market is merely a "healthy" digestion of recent gains.

Traders may also be taking profits in anticipation of the unknown, as the market continues to react to the ongoing geopolitical tensions and economic uncertainties.

References:

[1] MarketWatch. (2024, March 16). U.S. stocks closed mixed on Thursday in another jittery day of trade, as investors focused on rising bond yields and uncertain oil prices. https://www.marketwatch.com/livecoverage/stock-market-today-dow-futures-gain-as-netflix-earnings-eyed?mod=home-page

[2] CNBC. (2024, March 18). Stock market today live updates: Dow jumps more than 300 points, S&P 500 hits new record as Fed rate decision looms. https://www.cnbc.com/2024/03/18/stock-market-today-live-updates.html