Wall Street Stabilizes After Volatile Week of Trading/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Wall Street steadied Tuesday after sharp market swings, supported by corporate earnings and rate cut hopes. AI-driven stocks like Palantir surged, offsetting tariff concerns and mixed company reports. Investors remain cautious amid economic uncertainty and pressure on the Federal Reserve.
Wall Street Stabilizes After Volatile Week Quick Looks
- S&P 500, Nasdaq, and Dow see modest gains Tuesday
- Palantir Technologies soars 7.5% on strong earnings, AI optimism
- DuPont raises outlook despite $20M tariff hit
- Yum Brands dips after missing quarterly expectations
- Hims & Hers tumbles 12.2% despite profit beat
- Trump’s tariffs spark fears of economic slowdown
- Fed rate cut expectations rise after weak jobs data
- Treasury yields remain low at 4.22%
- Global markets largely up; India’s Sensex falls on U.S. tensions
- Market awaits September Fed decision on potential rate cut
Deep Look: Wall Street Holds Steady Following Whiplash Trading Week
NEW YORK — After a rollercoaster week on Wall Street, U.S. markets stabilized Tuesday morning, giving investors a much-needed breather. The S&P 500 rose 0.1%, rebounding after its best day since May—one that directly followed its worst day in the same time span. The Dow Jones Industrial Average gained 77 points (0.2%), while the Nasdaq composite edged up 0.1%.
The muted yet positive open comes amid a complex mix of economic pressures and investor optimism. On one hand, fears of economic fallout from President Donald Trump’s newly imposed tariffs continue to cast a shadow. On the other, growing expectations of a Federal Reserve interest rate cut—fueled by weaker-than-expected job data—are buoying market sentiment.
AI Stocks Lead Gains, Earnings Surprise Upside
Tech and AI-driven companies were among the strongest performers. Palantir Technologies led the rally, jumping 7.5% after beating Wall Street estimates and raising its full-year revenue forecast. The AI software firm has now doubled its stock price year-to-date.
“We continue to see the astonishing impact of AI leverage,” said CEO Alex Karp.
Chemical giant DuPont also posted better-than-expected earnings and raised its annual profit outlook, despite acknowledging a $20 million impact from the new tariffs in the second half of 2025. Its stock rose 4.5%.
Tariff Fallout Hits Some Sectors
Still, not all companies weathered the market turbulence. Yum Brands—the parent company of KFC, Taco Bell, and Pizza Hut—slipped 0.7% after its quarterly results missed expectations.
Telehealth provider Hims & Hers Health took a bigger hit, tumbling 12.2%. Despite reporting a profit that beat analysts’ projections, the company’s revenue fell short, triggering investor pullback.
The mixed corporate performance reflects the pressure on companies to justify lofty valuations, especially after the market’s strong run from its April lows to recent record highs.
Interest Rates, Fed Policy in Focus
As corporate profits face scrutiny, monetary policy is emerging as a pivotal driver for investor sentiment. Following Friday’s weaker-than-expected jobs report, bets on a September rate cut by the Federal Reserve have surged.
Lower interest rates typically boost equities by reducing borrowing costs and improving corporate margins. They also make stocks more attractive relative to bonds. However, the risk of rekindling inflation remains a concern.
“Revisions solve the tension between timeliness and accuracy,” said economist Jed Kolko. “Timely data matters, but so does credibility.”
Yields Remain Depressed
Treasury yields, which had plummeted after the jobs report, remained stubbornly low. The yield on the 10-year Treasury held steady at 4.22%, down from 4.39% before the labor data release. Lower yields are typically seen as bullish for stocks, signaling investor demand for safer assets amid economic uncertainty.
Global Markets Mostly Positive, India Lags
Globally, most major indices across Europe and Asia posted gains. However, India’s Sensex slipped 0.4%, bucking the trend. The decline was attributed to growing trade tensions with the United States over India’s ongoing oil imports from Russia, which have drawn criticism from the Trump administration.
This geopolitical tension adds a layer of complexity to investor strategies, particularly for those with emerging market exposure.
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