Nasdaq 100 and S&P 500: Tech Stocks Lead Today’s Rebound Amid Volatile Oil Prices

Stocks Rebound After Monday’s Decline as Tech and Oil Prices Drive Momentum

U.S. stocks bounced back on Tuesday, recovering from the prior session’s losses as traders focused on rising oil prices and bond yields. The Dow Jones Industrial Average gained 26 points (0.1%), the S&P 500 added 0.5%, and the Nasdaq Composite rose 0.5%. This rebound followed a sharp sell-off on Monday when the Dow fell nearly 400 points, and the tech-heavy Nasdaq dropped 1.2%, primarily due to declines in technology stocks.

Tech Sector and Early Movers

Technology stocks, which were among the hardest hit on Monday, regained ground. Nvidia led the charge, rising 1.6%, while Super Micro Computer surged early, it couldn’t hold on to its gains, dropping 3.77% shortly after the opening.

Super Micro continued its momentum from Monday during the pre-market session, adding another 4% after revealing it had deployed over 100,000 GPUs with its advanced cooling solutions to major AI factories.

Meanwhile, Wells Fargo saw a 1% uptick after an analyst upgrade, and shares of DocuSign rose 5% after being added to the S&P 500 MidCap 400 index.

However, the casino sector faced pressure as Wynn Resorts and Las Vegas Sands dropped over 4% and 3%, respectively, following China’s decision to withhold new economic stimulus measures. PepsiCo also saw a premarket dip of 1% after cutting its revenue growth forecast, despite exceeding earnings expectations by 2 cents per share in its latest quarterly report.

Oil Prices and Rising Bond Yields in Focus

West Texas Intermediate (WTI) crude oil futures experienced some volatility, rising above $77 per barrel earlier this week but retreating by about 2% on Tuesday. This pullback came as traders monitored potential disruptions in the Middle East following missile attacks from Iran, and U.S. efforts to prevent further conflict escalation.

Bond yields continued their upward trend, with the 10-year U.S. Treasury yield edging up to 4.05%, marking its highest level since August 1. Higher bond yields often put pressure on stock prices by increasing borrowing costs, which weighed on the broader market earlier in the week.

Fed Policy and Geopolitical Risks

Federal Reserve Governor Adriana Kugler expressed concern about the economic risks posed by geopolitical tensions in the Middle East and the impact of Hurricane Helene on the U.S. economy. Speaking at a conference in Frankfurt, Kugler backed the Fed’s recent half-point rate cut but warned that the central bank might need to slow its easing pace if inflation remains persistent.

Market participants will be paying close attention to this week’s speeches by Federal Reserve leaders, including Boston Fed President Susan Collins and Atlanta Fed President Raphael Bostic, along with key economic data on inflation and the trade deficit.

Market Outlook: October Volatility Offers Buying Opportunities

Although volatility remains high in October, Piper Sandler sees it as an opportunity for investors. The firm recommends taking advantage of “healthy pullbacks” in sectors like industrials, financials, and technology, especially among small and mid-cap stocks. Despite recent fluctuations, Piper Sandler maintained its year-end S&P 500 target of 5,800, suggesting only a modest increase from current levels.

With earnings season underway and geopolitical risks intensifying, traders are likely to remain cautious in the short term. However, selective buying during market pullbacks may provide opportunities for long-term gains.