Wall Street reports strong comeback after heavy sell-off

The main indices on Wall Street impressively recovered on Tuesday, as investors returned to the market following Monday's dramatic sell-off. The Dow Jones Industrial Average gained three-quarters of a percent, while the S&P 500 and the Nasdaq each recorded a one percent rise. In recent statements, the Federal Reserve's monetary policymakers dismissed the view that the weaker-than-expected labor market data for July signals an impending recession. Bill Fitzpatrick, portfolio manager at Logan Capital Management, shares this assessment — at least for now. "Regarding a potential recession, I would like to first point out that the U.S. economy continues to grow at a rate of two and a half percent. As of today, there is no immediate danger of an imminent recession. However, numerous indicators suggest that our economy is not only weakening but will continue to weaken," Fitzpatrick explained. He added that the impact of higher interest rates on the economy is significantly delayed — not by six months, but rather over 12, 18, or even 24 months. According to the CME Group's FedWatch tool, traders see a 75 percent probability that the Fed will cut interest rates by 50 basis points at its next meeting in September. However, Federal Reserve Chairman Jerome Powell may give indications of the central bank's stance later this month during his speech at the annual meeting of central bank representatives in Jackson Hole, Wyoming. Among the standout stocks on Tuesday was Nvidia, which rose by nearly 4%, giving the largest boost to the S&P 500 and Nasdaq. Uber's shares jumped 11% after the company exceeded Wall Street estimates for revenue and core earnings in the second quarter in its ride-sharing and food delivery segments, supported by steady demand for its services. Caterpillar also impressed with a 3% gain, after the company exceeded analysts' expectations for second-quarter earnings. The rise in prices for larger excavators and other equipment was able to offset the waning demand in North America.