S&P 500 rises in unstable buying and selling as market tries to recuperate from 3-day shedding streak

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US stocks sawawed Tuesday as the major averages fought to recover from three days of heavy selling that brought the S&P 500 to its lowest level in more than a year.

The Dow Jones Industrial Average was last trading up 130 points, or 0.4%, after rising more than 500 points and dipping more than 350 points earlier in the session. The S&P 500 rose 1%, while the Nasdaq Composite added 2%.

“We’re in a market where you just can’t hold on to any rallies,” Paul Hickey of Bespoke Investment Group told CNBC’s “TechCheck” on Tuesday. “… It’s not surprising given the overall trends we’ve seen over the last several days and I think we’re just going to see more of this going forward.”

Dow Transports dipped about 1%, dragging the index lower. The moves further signaled concerns of a recession as the industry is typically used to measure the strength of the economy. IBM, Home Depot, 3M and JPMorgan Chase fell more than 2% each, leading the market losses.

Meanwhile, beaten-up technology stocks like Microsoft, Intel and Apple led Tuesday’s gains. The sector has suffered some of the biggest losses in recent weeks as investors moved out of growth areas and into safe havens like consumer staples and utilities amid recessionary fears.

“Up to now this weakness has been driven by growth, tech and cyclicals and although we expect further weakness and indeed underperformance here, we are now also seeing concerning signs that the value space may be close to establishing an important top in absolute terms, whilst some key defensive sectors are also threatening tops,” wrote Credit Suisse’s David Sneddon.

Amid the sell-off, investors continue to look for signs of a bottom.

“We’ve checked a lot of the boxes that you’d want to check along the way to a correction,” said Art Hogan, chief market strategist at National Securities. “Once you get to the household names, the leaders, the generals, you tend to be at the later phases of that corrective process.”

Some, including hedge fund manager David Tepper, think the sell off is nearing an end. Tepper told CNBC’s Jim Cramer on Tuesday that he expects the Nasdaq to hold at the 12,000 level.

Meanwhile, Treasury yields eased from multiyear highs and the benchmark 10-year Treasury note yield traded below 3% after hitting its highest level since late 2018 on Monday.

Much of the recent market moves have been driven by the Federal Reserve and how aggressive it will need to act in order to fight rising inflation.

Tuesday’s moves came after the S&P 500 dropped below the 4,000 level to a low of 3,975.48 on Monday. It marked the index’s weakest point since March 2021. The broad market index dropped 17% from its 52-week high as Wall Street struggled to recover from last week’s losses.

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“Despite our expectation of falling inflation and sustained growth, we believe investors should brace for further equity volatility ahead amid significant moves in key economic variables and bond markets,” wrote Mark Haefele of UBS. “We continue to favor areas of the market that should outperform in an environment of high inflation.”

On the earnings front, Peloton Interactive plummeted 13% after reporting a wider-than-expected loss in the recent quarter. AMC’s stock dropped 7.5%, while Novavax dipped 2.5% on the back of recent quarterly earnings.

Investors are looking ahead to earnings from Coinbase, Roblox, RealReal and Allbirds after the bell. Meanwhile, traders await April consumer price index data on Wednesday which is expected to come in slightly below March’s 8.5% and could signal that inflation has reached a peak.