MSCI’s gauge of stocks across the globe gained 8.91 points, or 1.17%, to 770.99, below its 777.81 session high
Equities around the world rebounded on Tuesday from the previous day’s aggressive sell-off while Treasury yields rose and the dollar was marginally up as investors ventured back into risk assets and central banker comments soothed recession concerns.
Oil prices settled higher on Tuesday after reaching multi-month lows on Monday, as investor attention turned to supply tightness while financial markets rebounded, easing worries about the outlook for energy demand.
Earlier the Nikkei’s almost 10% rebound in Tokyo brought some relief after the index’s 12.4% decline on Monday triggered a global rout with the Japanese benchmark’s biggest one-day sell-off since the 1987 Black Monday crash.
The S&P 500 had skidded 3% on Monday, while the Nasdaq plummeted 3.43%, extending a recent sell-off as fears of a possible U.S. recession spooked global markets.
U.S. Fed policymakers pushed back on Monday against the notion that weaker-than-expected July jobs data means the economy is in a recessionary freefall.
Late on Monday San Francisco Fed President Mary Daly said the jobs report leaves “a little more room for confidence that we’re slowing but not falling off a cliff.” But she said it was “extremely important” to keep the jobs market from falling over.
The question investors are grappling with is whether we’re hitting an economic air pocket or whether it’s a head fake. It was a single monthly jobs report so you’d want to be careful about reading too much into it, according to Scott Helfstein, head of investment strategy at Global X.
In the absence of economic data this week, what the market has to work through is whether we keep bouncing around or do we settle in and be patient for more information, he said.
On Wall Street the DJIA gained 294.39 points, or 0.76%, to 38,997.66, the S&P 500 added 53.70 points, or 1.04%, to 5,240.03 and the Nasdaq Composite advanced 166.77 points, or 1.03%, to 16,366.86.
MSCI’s gauge of stocks across the globe gained 8.91 points, or 1.17%, to 770.99, below its 777.81 session high. This was after the index dropped more than 3% on Monday for its third consecutive day of losses.
Europe’s STOXX 600 index earlier closed up 0.29% in a volatile session during which it declined 0.54%.
In currencies, the dollar recovered against major peers and the Japanese yen steadied near 7-month highs against the U.S. currency as some of the most striking moves of recent days reversed somewhat and a semblance of calm returned to markets.
The dollar index added 0.07% at 102.94.
Against the Japanese yen, the dollar firmed 0.4% to 144.74 while the euro was 0.2% lower at $1.093.
