Nasdaq Index: Forecast for US Stocks Improves as Tech Rebounds, Dollar Weakens

Stocks Tick Higher Mid-Session as Tech Rebounds; Treasurys, Dollar Slide on Tariff Fallout

U.S. equities rose modestly by midday Wednesday, supported by a strong rebound in technology stocks even as bond and currency markets reeled from escalating U.S.-China trade tensions. The Nasdaq led with a 1.43% gain, followed by a 0.67% rise in the S&P 500 and a 0.45% lift in the Dow. Investors stepped back into growth names following four days of aggressive selling triggered by sweeping tariff hikes from both Washington and Beijing.

What sectors are driving the market rebound?

Technology led all sectors, surging 3.18% as Apple jumped over 5% after sustained pressure tied to its China exposure. Tesla gained more than 5% as well, retracing some of its recent losses despite ongoing trade risks. Communication services followed with a 2.09% rise, while consumer discretionary and industrials added 0.68% and 1.7%, respectively. Real estate and utilities lagged, both down over 1%, with investors rotating out of defensives in favor of growth.

Retailer Walmart rose 5% after its CFO said the company tends to gain market share in uncertain economic conditions, though it withdrew its Q1 operating outlook. Delta Air Lines climbed 7% despite scrapping its 2025 forecast, as CEO Ed Bastian acknowledged tariff-related booking weakness. Capri surged 10.3% following reports that its deal to sell Versace to Prada may be faltering.

Financials also saw strong buying, with Citigroup up 5.97%, Wells Fargo gaining 4.61%, and JPMorgan Chase advancing 6.57%. Traders appear to be positioning ahead of Friday’s earnings from major banks, betting that recent selling may have overshot the fundamental risks tied to recession concerns.

Why are Treasury yields spiking despite recession concerns?

The 10-year yield briefly topped 4.51% overnight before settling around 4.40% following a strong $39 billion auction. The 30-year yield held near 4.87%. The sharp moves are being linked to fears that China may be unloading U.S. government debt in retaliation to the 104% tariffs announced by the Trump administration. China responded with 84% duties on U.S. imports, raising the risk of further economic fallout.

The selloff resembles liquidity strains seen in March 2020, with some traders speculating that traditional haven demand for Treasurys may be deteriorating.

Why is the dollar falling even as risk sentiment deteriorates?

The dollar weakened broadly as investors rotated into gold and the Swiss franc. The dollar index dropped 0.39% to 102.37. Gold spiked 3.53% to $3,088.80 an ounce. The euro rose 0.68% to $1.1031, while the greenback fell 0.77% against the yen and 0.66% against the franc. The move highlights a growing retreat from U.S. assets across the board, not just equities and bonds.

ING analysts pointed to a broader “sell America” tone, driven by recession fears and concerns about how trade policies will impact capital flows and inflation.

What should traders focus on next?

Attention shifts to Thursday’s $22 billion 30-year bond auction and Friday’s earnings from major banks, which could reshape market sentiment. The Fed remains constrained—rising long-term yields and persistent inflation risks could limit its policy flexibility. Traders should closely watch Treasury demand and corporate guidance for signs of stability or further downside pressure.

More Information in our Economic Calendar.