Positive Momentum for Major US Stock Indices Following Tech Sell-Off

The Nasdaq and S&P 500 rebounded significantly on Tuesday, reversing a sharp downturn in the technology sector sparked by concerns about the potential impact of a cost-efficient AI model from Chinese startup DeepSeek.

Nvidia's Recovery

NVIDIA (NVDA), a bellwether for the chip industry, led the rebound, surging nearly 9% after shedding a record $589 billion in market capitalization during the previous trading day.

Indices Performance

Aided by Nvidia's gains, the Nasdaq Composite (^IXIC) rallied by over 2%, rebounding from a closing loss of more than 3%. The S&P 500 (^GSPC) gained around 0.9%, while the Dow Jones Industrial Average (^DJI) increased by approximately 0.3%.

Sector Rotation

Notably, the technology sector recorded its most significant two-day reversal in over two years after enduring its worst day since March 2020 on Monday.

Investor Focus on Big Tech Earnings

With the DeepSeek risk in mind, investor focus shifted towards the upcoming earnings reports from Big Tech companies, including Apple (AAPL), Tesla (TSLA), Meta (META), and Microsoft (MSFT).

Economic Data and Policy Decisions

Economic indicators such as durable goods orders, the FHFA house price index, and the S&P CoreLogic Case-Shiller home prices also released on Tuesday. Investors closely monitored these figures for insights into the health of the economy and real estate market.

Fed Policy Expectations

The Federal Reserve's two-day policy meeting commenced on Tuesday, with investors anticipating a decision on interest rates and economic projections on Wednesday afternoon.

Starbucks Earnings

Starbucks (SBUX) shares jumped over 4% in after-hours trading after reporting strong earnings that beat estimates on revenue and profits. Same-store sales declined for the fourth consecutive quarter, reflecting the company's ongoing turnaround plan.

The Container Store Emerges from Bankruptcy

The Container Store, a home goods retailer, emerged from Chapter 11 bankruptcy on Tuesday, announcing it had achieved its restructuring goals, including reducing debt and accessing new financing.