The stock market rebounded Tuesday, shrugging off the latest moves in the U.S.-China trade war.
The Dow Jones industrial average climbed 0.7%, at one point reaching the highest level since Jan. 31. Dow component Microsoft (MSFT) rallied 1% after Oppenheimer raised the price target to 127 from 120. Microsoft is holding a major conference next week. The stock is extended from its latest base.
The Nasdaq rose 0.8%. The composite fell nearly to its 50-day moving average Monday and snapped right back Tuesday. The rebound looked similar to one last week, although that one faded once the Nasdaq got to the 8,000 level. The Nasdaq remains below 8,000.
The S&P 500 added 0.5% and is about 12 points from a record high. The Russell 2000 rose 0.5% at the closing bell and it is also trying to rise from its 50-day line.
There was steady improvement in the indexes into midday, then the market started going sideways. Volume rose from Monday’s totals, according to preliminary data.
While the market weakened Monday on news that U.S. officials set new tariffs on $200 billion worth of Chinese imports, the market took it all in stride Tuesday. Even after China fought back by announcing tariffs on $60 billion of U.S. goods, the stock market brushed aside trade-war worries.
Rebounding technology stocks helped the Nasdaq on Tuesday. But solar stocks also helped, with the group up more than 4%. Biotechs also contributed, with that group climbing about 1.5%.
Amazon.com (AMZN) rose after dropping near the 50-day moving average. While the bounce was encouraging, it represented a risky entry because the stock is well above a late-stage breakout.
Auto manufacturers were Tuesday’s worst group, and the industry could blame Tesla (TSLA) for that. The electric-car company fell more than 3% after reports said the company is under criminal investigation over CEO Elon Musk’s statements about taking the company private.
Tesla shares were trying to rebound after a steep decline that started in August, until the news of the investigation came out Tuesday.
