Wall Street stages ‘Turnaround Tuesday’ after biggest sell-off in two years – but JPMorgan warns stock market rout is only ‘half complete’

On Wall Street, the Dow Jones Industrial Average rose 399 points, or 1.03 percent, to 39,102.29 at 11:12 a.m.

The S&P 500 rose 1.42 percent to 5,259.80.

The Nasdaq rose 1.41 percent to 16,428.15.

The European STOXX 600 index rose 0.46 percent in a volatile session, with a dip of around 0.5 percent at the lowest point. Markets in Europe are now closed.

Fears of a US recession were blamed for Monday’s stock market crash.

But according to JPMorgan, another factor played a major role: the unwinding of so-called ‘carry trades’.

A carry trade is when an investor borrows money in a currency with low interest rates. This has happened to global investors who borrowed money in Japan where interest rates were very low unlike most countries like the UK and the US.

But the Japanese yen has risen 11 percent against the dollar in the past month after it became clear that the Bank of Japan would raise interest rates.

This meant that investors had to unwind these carry trades.

“We are far from done,” said Arindam Sandilya, co-head of global FX strategy at JPMorgan, on Bloomberg TV.

“The ‘carry trade unwind’ is, at least within the speculative investment community, somewhere between 50 and 60 percent complete.”

Shark Tank star Kevin O’Leary gives his fascinating assessment of Monday’s stock market crash – in an exclusive interview with DailyMail.com.

A financial writer and stock analyst now says the Federal Reserve will be forced to make an emergency rate cut before its next meeting in September to stem the widespread stock market sell-off in recent days.

Robert Prechter, founder and president of Elliott Wave International, spoke to Neil Cavuto on Fox Business Monday night and said the Fed missed a major opportunity at its meeting last week to get ahead of the market disaster that continues to unfold.

“I think there will be a surprise rate cut before the September meeting because I think interest rates will have started to fall faster then,” he said.

The last time the Fed made emergency rate cuts was in the early days of COVID. Many experts believe that this will not happen now, as it would signal that the US economy is in bad shape, potentially leading to even more panic in the market.

In January, Prechter warned that too much optimism in the market was dangerous. He said Monday that optimism is now “entrenched” and that the world is seeing “the most overgrown market ever.”

The S&P 500 rose 1.1 percent in the first hour of trading on Tuesday.

The tech index Nasdaq also started to recover, rising 0.7 percent at 10:30 a.m.

Both indices fell 3 percent on Monday amid a global stock sell-off.

Bitcoin rose 0.6 percent to $54,734, a recovery from a nearly six-month low of $49,445 hit on Monday.

Apple has had another rough start to the day, with shares falling more than 3 percent in the first half hour of trading.

Shares of the tech giant fell more than 6 percent on Monday after Warren Buffet’s Berkshire Hathaway halved its stake in the company, following news that it had lost a federal antitrust case.

US stock prices rose cautiously on Tuesday morning, following Monday’s sell-off.

The S&P 500 rose 0.5 percent in the first 15 minutes of trading, but then fell again.

The Nasdaq tech exchange rose 0.7 percent.

Both indices fell 3 percent on Monday, a day of pain for investors.

The S&P 500 rose slightly when markets opened in New York at 9:30 a.m.

Global stocks rose in jittery trading on Tuesday as uncertainty created by the previous day’s aggressive sell-off weighed on investor sentiment even as central bank officials said the right things to calm sentiment.

The Nikkei’s 10 percent recovery in Tokyo last night provided a first sense of relief after the index fell 12.4 percent on Monday, the biggest daily sell-off since the Black Monday crash of 1987.

European markets were mixed, with the pan-regional STOXX 600 swinging between a daily loss of 0.4 percent and a gain of 1 percent, while U.S. stock futures remained volatile.

S&P 500 futures rose 1 percent after earlier moving toward zero, while Nasdaq futures rose 1.2 percent.

The S&P 500 fell 3 percent on Monday, while the Nasdaq fell 3.43 percent, extending a recent sell-off as global markets feared a potential U.S. recession.

European stock markets stabilized on Tuesday as Asian indices recovered somewhat from a global recession fueled by fears of a US recession.

Tokyo, which suffered a record loss on Monday, boosted gains by more than 10 percent as traders bought stocks that had been hammered by a disastrous start to the week for markets.

However, analysts warned that more volatility was likely to come, even as major European stock markets – which fell much less sharply than their Asian counterparts on Monday – stabilised on Tuesday.

Monday’s sell-off followed Friday figures showing fewer U.S. jobs were created than expected last month, while another report pointed to continued weakness in the manufacturing sector.

That led to warnings that the US Federal Reserve had kept interest rates at their highest level in two decades for too long and that a recession was looming.

Meanwhile, this has led to market speculation that the US central bank could make an emergency rate cut ahead of the expected cut next month.