S&P 500 Rebound 1% Led by 6% Nvidia Gain, Inflation Data

The S&P 500 experienced a notable rebound on Tuesday, closing 1% higher and effectively erasing all of its losses for the year 2025. This surge was primarily driven by a strong performance in the technology sector, with Nvidia leading the charge. The tech giant's shares rose by approximately 6%, contributing significantly to the overall market recovery. This positive momentum was fueled by a combination of favorable developments in technology, trade, and inflation.

The market's optimism was bolstered by encouraging inflation data, which showed a slower-than-expected increase in the Consumer Price Index. This data indicated that inflationary pressures were not as severe as initially feared, providing a sense of relief to investors. Additionally, the recent de-escalation in the trade dispute between the U.S. and China further boosted market sentiment. The two countries agreed to reduce tariffs on each other's imports for a period of 90 days, which helped alleviate concerns about potential economic slowdowns and corporate profit reductions.

The technology sector, which had been a significant contributor to the market's gains, continued its upward trajectory. Alongside Nvidia, other major tech companies such as Broadcom, Tesla, and Meta Platforms also saw substantial gains. This broad-based strength in the tech sector helped drive the S&P 500 into positive territory for the year. The Nasdaq Composite, which is heavily weighted towards technology stocks, rose by 1.6%, further underscoring the sector's resilience.

The rally was not limited to the tech sector alone. Other notable movers included Palantir, which rose by 9%, and Coinbase, which spiked over 18% on news of its inclusion in the S&P 500, signaling a dramatic turnaround for the crypto industry under a more favorable regulatory climate. These gains were driven by positive developments within their respective industries, further contributing to the overall market optimism.

The market's positive performance was also supported by a rise in the price of Bitcoin, which reached a new high. This increase in the digital currency's value provided additional momentum to companies with significant holdings in Bitcoin, such as MicroStrategy, which saw its shares climb. The overall market sentiment was further bolstered by the performance of other sectors, including energy and materials, which also saw gains on the day.

The market's recovery was not without its challenges, however. The Dow Jones Industrial Average slipped by 0.6%, largely due to a significant drop in shares of UnitedHealth Group. The health insurance giant suspended its full-year outlook and announced the departure of its CEO, which led to a 18% decline in its shares. This development weighed on the overall performance of the Dow, which would have closed higher were it not for this setback.

Despite these challenges, the market's overall performance on Tuesday was a testament to its resilience and ability to recover from setbacks. The combination of favorable inflation data, positive developments in trade, and strong performance in the technology sector provided a solid foundation for the market's recovery. As the year progresses, investors will continue to monitor these factors closely, as they will play a crucial role in shaping the market's trajectory.