Investing.com – The S&P 500 closed higher Tuesday, as tech rebounded from a rout a day earlier, with focus shifting to the Federal Reserve decision due Wednesday.
At 4:00 p.m. ET (21:00 GMT), the Dow Jones Industrial Average gained 136 points, or 0.3%, while the S&P 500 index gained 0.9%, and the NASDAQ Composite added 2%.
The tech sector has rebounded Tuesday, with AI chip leader Nvidia (NASDAQ: NVDA ) edging higher, a day after $593 billion was wiped off its market value in the biggest single-session loss for any company. Fears about Chinese AI startup Deepseek posing a risk to the AI dominance of U.S. corporates was downplayed by some on Wall Street, who suggested that cheaper AI solutions are likely to lead to wider option.
"Our thinking on the matter hasn't changed since yesterday; whatever its ultimate impact on AI hardware revenue might be, cheaper access to AI services can help reduce costs for AI users and promote earlier adoption," Macquarie said in a recent note.
The rebound amid big week for big tech with the "Magnificent 7" members including Microsoft (NASDAQ: MSFT ), Facebook-parent Meta Platforms (NASDAQ: META ), Apple (NASDAQ: AAPL ) and Tesla (NASDAQ: TSLA ) set to report quarter earnings later this week.
General Motors (NYSE: GM ) stock fell nearly 9% after the auto giant swung to a loss in the fourth quarter on huge charges related to China.
Royal Caribbean (NYSE: RCL ) stock rose 12% after the cruise operator reported better-than-expected fourth quarter earnings and provided a robust outlook for 2025.
Boeing (NYSE: BA ) stock rose 1.5% after Chief Executive Officer Kelly Ortberg detailed plans for a turnaround following the aircraft manufacturer posting its sixth consecutive annual loss, its biggest annual loss since 2020, as it grappled with the fallout from a prolonged machinists strike, charges from U.S. government projects and expenses linked to a slew of job cuts.
JetBlue Airways (NASDAQ: JBLU ) stock slumped nearly 26% after the carrier reported a hefty loss for the fourth quarter of 2024, with unit revenue guidance weaker than expected.
Focus this week was squarely on the Federal Reserve's upcoming two-day policy meeting , due to start later in the session.
The Fed is widely expected to keep borrowing costs unchanged at the end of its meeting on Wednesday, following a string of reductions late last year that left the all-important benchmark rate at a range of 4.25% to 4.50%.
Fed’s preferred gauge of inflation -
PCE price index
data, and advance GDP estimates for the fourth quarter are also due this week.
Data released earlier Tuesday indicated that single-family house prices increased moderately in November as higher mortgage rates curbed demand.
House prices rose 0.3% on a month-on-month basis after an upwardly revised 0.5% increase in October, advancing 4.2% in the 12 months through November, following an unrevised 4.5% gain in October.
(Peter Nurse, Ayushman Ojha contributed to this article.)