Markets Bounce Back with Tech Leading the Charge
After enduring four consecutive sessions in the red, the Nasdaq Composite turned the tide on Tuesday with a notable rebound, largely driven by standout performances from heavyweights like Netflix (NFLX) and Tesla (TSLA). Despite midday headwinds that temporarily dragged the index well below its earlier highs, a strong late-session recovery pushed it to a solid finish.
The Nasdaq climbed above the 16,000 mark, logging a 2.7% gain on heightened trading volume. This rally also marked a follow-through day on the 11th day of its recovery attempt—a key signal often looked to for market strength. The S&P 500 wasn't far behind, also climbing 2.5% on heavier volume.
While follow-through days typically signal momentum and conviction, Tuesday's action was more muted. The Nasdaq briefly moved past its 10-day moving average but closed below it, while the S&P 500 ended exactly at that benchmark. Both indexes continue to wrestle with overhead supply after recent declines.
The Dow Jones Industrial Average and the small-cap Russell 2000 also posted healthy 2.7% gains. On the Nasdaq, advancing stocks outnumbered decliners by more than 4 to 1, while on the NYSE, that ratio surged to an impressive 10 to 1.
Earnings & Movers
Tesla shares climbed 4% ahead of its quarterly earnings report, and the momentum continued after hours—even though the EV maker missed analyst expectations and struck a cautious tone about the rest of the year.
Netflix presented a compelling case for investors as the stock retook a key buy point at 998.70, closing near the top of its ideal entry range after last week's impressive earnings.
News of a potential easing in U.S.-China trade tensions, reportedly hinted at by Treasury Secretary Scott Bessent, further energized the market around midday, although those gains moderated in the afternoon.
Among notable movers, Spotify (SPOT) surged nearly 6% on the day as it builds the right side of a double-bottom base, eyeing a breakout at 621.20. Quest Diagnostics (DGX) jumped early following a strong earnings report, edging closer to completing a flat base with a buy point near 178.87.
While Tuesday didn't unveil a wave of new entry points, several high-quality growth stocks are setting up. Stride (LRN) is consolidating near its peak, and MercadoLibre (MELI) is targeting a breakout from a double-bottom pattern at 2,202.
