US Stocks Recover After Worst Drop in Seven Months
The US stock market rebounded sharply on Tuesday (March 31) after falling to a seven-month low in the previous session, supported by falling bond yields.
The S&P 500 and Nasdaq 100 each rose 2%, while the Dow Jones Industrial Average added 700 points. The decline in Treasury yields continued across the curve, reflecting increased vigilance over growth concerns stemming from surging energy prices. This decline in yields provided a positive boost to stocks across all sectors despite continued increases in oil and other commodity prices.
President Donald Trump stated that the US is closer to reaching a deal with Iran, but the market remains skeptical about the possibility of resuming tanker flows through the Persian Gulf.
Meanwhile, risk-sensitive technology companies saw sharp gains after previously underperforming, with MetaTrader 5 surging 3% while Microsoft, Nvidia, and Amazon each rose more than 2%. Eli Lilly also gained 2.5% after acquiring Centessa for $7.8 billion. On the other hand, McCormick plunged 7% after announcing plans to merge with Unilever's food business in a $44.8 billion deal.
Cause and Effect:
The primary driver of the US stock market rebound was falling bond yields, which eased investor concerns about inflation driven by high energy prices. This provided support for stocks across various sectors. However, geopolitical tensions over Iran remained a looming factor, despite Trump's statements about progress in negotiations.
As a result, investors began to refocus on a potential deal between the US and Iran despite lingering doubts, with the technology and pharmaceutical sectors posting the best performance.
Source: Newsmaker.id
