S&P 500 has its best day since May: stocks partially recovered from Friday's collapse

All four major U.S. stock indices rose more than 1% on August 4, with the S&P 500 having its best day since May. The market partially recovered from the collapse late last trading week, which was triggered by Donald Trump's duties and a weak jobs report. Stocks often bounce back up after a selloff, so Tuesday's performance is more likely to provide a more reliable signal of market sentiment, analysts said.

- The S&P 500 index rose 1.47% - to 6,329.94 points - at the close of trading on Monday, August 4. That marked the index's best one-day gain since May, noted Bloomberg. About 85% of the companies included in the index ended the day in the plus, with technology companies leading the growth, the agency wrote. For example, Nvidia and Meta rose 3.6% and 3.5%, respectively.

- The blue-chip index Dow Jones added 1.34% to 44,173.64 points.

-  The Nasdaq Composite technology index rose 1.95% - to 21,053.58 points.

- The Russell 2000 Small Capitalization Companies Index increased 2.1% to 2,212.3 points.

- By contrast, the CBOE Volatility Index, also known as the Wall Street Fear Index, fell 14% to 17.5 points on Monday.

Investors tried to recoup the big losses they suffered on Friday, August 1: then the S&P 500 had, on the contrary, the worst day since May - it was down 1.6%.

"Today [Aug. 4] is sort of a bounce day. It's not uncommon for stocks to bounce after a fall, so that's what's happening. We have to wait and see what happens tomorrow, because there's a possibility that investors will think, 'You know, we really need to take some money off the table to digest some of these gains,'" Sam Stovall, chief investment strategist at CFRA Research, told CNBC.

The market is gearing up for a historically weak month: August is the worst time for the Dow Jones Industrial Average, data since 1988 show, and the second worst for the S&P 500 and Nasdaq Composite, CNBC cited data from Stock Trader's Almanac.

"This week is a quiet week in terms of the economic calendar, so traders may be looking for clues in company reports, along with news of any new duties and trade," noted Chris Larkin, managing director at E*Trade (a Morgan Stanley project), as quoted by Bloomberg. The key question is whether traders will take signs of a weakening U.S. economy as a negative factor for the market or as a catalyst for a sooner Fed rate cut, Larkin added.

"The current week will be telling: we're seeing a tug-of-war between traditional institutional seasonality, which suggests weakness, and retail investors, who may see the downturn as a buying opportunity. It's a good test to see who's really at the helm," said Nationwide chief market strategist Mark Hackett, he was quoted as saying by Bloomberg.

The sell-off on Friday was triggered by two pieces of bad news: U.S. President Donald Trump signed executive orders imposing increased duties on nearly 70 countries and territories, and the U.S. Bureau of Labor Statistics reported weak job gains in July and downward revisions to statistics for May and June.

Geopolitical concerns have also added to these complexities. Trump declared that he had ordered the deployment of two nuclear subs "in appropriate regions" because of "extremely provocative" statements by former Russian President Dmitry Medvedev.

This article was AI-translated and verified by a human editor