Major domestic equity indexes closed out the trading day with gains in excess of one percent on Tuesday, helped by chip and transport stocks as cheaper prices following the steep decline brought back the bargain hunters.
All 11 major S&P 500 sectors ended trading day in the black, after a volatile session that pushed the benchmark S&P 500 lower and close to confirming its second correction of 2018.
The Philadelphia semiconductor index ended the day with a gain of 4.2 percent, its largest one-day percentage gain since March. Intel rose 5.2 percent and gave the largest single-stock helping hand to the S&P 500 index.
Shares of companies producing computer chips also gained following a brokerage upgrade of Nvidia shares and a better-than-expected report from KLA-Tencor. Nvidia rose 9.4 percent and KLA-Tencor shares were up 7.6 percent.
The Dow Jones Transport Average end the day up 2.8 percent, its largest one-day rise in about a year. A decline in oil prices most likely played a significant role.
Market volatility has spiked in recent weeks, stemming from higher interest rates and concerns over economic growth peaking and the increase in trade tensions. There is also considerable uncertainty surrounding congressional elections now just a week away.
The S&P 500 index is on pace for its largest monthly percentage drop in more than eight years. At the same time, S&P 500 companies are on pace for an overall 25.3 percent increase in third-quarter earnings with more than half of the constituents having reported, according to I/B/E/S data from Refinitiv.
Despite the large overall earnings increase, some high-profile companies have issued disappointing reports. For example, General Electric fell 8.8 percent after the company drastically reduced its dividend and said it faced a deeper accounting probe.
In other news, Coca-Col’s shares were up 2.5 percent after the company’s quarterly revenue and earnings numbers exceeded Street expectations.
Under Armour saw its share price rise 24.7 percent after an upbeat quarterly and full-year earnings forecast.
Approximately 9.6 billion shares changed hands on the major domestic equity exchanges, a number that was well above the 8.6 billion share daily average over the past 20 trading sessions.