US stocks opened higher on Tuesday, rebounding from a significant downturn despite a lack of substantial positive news. The market remained focused on the turbulence caused by President Donald Trump's comprehensive reciprocal tariffs, which led to the largest losses since the pandemic. 

As of 09:38 AM, ET (or 04:38 PM in Riyadh), the broad-based S&P 500 index(SPX.US) increases markedly by 141 points or 2.79% to 5,204, the tech-heavy NASDAQ(IXIC.US) is up 507 points or 3.25% to 16,111, and the blue-chip Dow Jones Industrial Average(DJI.US) heads sharply up by 1,100 points or 2.9% to 39,066.

Market Sentiment and Volatility

Despite the rebound, market analysts remain cautious. Fiona Cincotta, a senior market analyst at Citi Index, noted, "This appears to be more of a temporary bounce rather than a full recovery, as the underlying factors causing the market's decline have not fundamentally changed." The CBOE Volatility Index (VIX), which measures market fear, remained elevated at 44, having spiked to around 60 on Monday. Analysts suggest that such extreme levels might indicate an impending technical rebound.

BlackRock CEO Larry Fink suggested that this might be a buying opportunity in the long term, while Goldman Sachs strategists warned of the potential for a more prolonged cyclical bear market. The rapidly changing trade-related news has added to market uncertainty, with investors seeking safe havens to mitigate the impact of the volatility.

Economic and Policy Implications

By Monday's close, US markets had experienced three days of intense volatility. Monday saw approximately 29 billion shares traded, the highest volume in at least 18 years. The Dow Jones Industrial Average fluctuated dramatically, plunging over 1,700 points at its lowest before rebounding, with an intraday swing of 2,595.24 points. The S&P 500 briefly entered bear market territory on Monday, reflecting a drop of over 20% from its recent peak.

US Treasury Secretary Scott Bessent stated that retaliatory tariffs by foreign countries were a "big mistake," adding that around 70 countries had approached the US for tariff negotiations. He mentioned that the Trump administration was open to negotiations, provided substantial proposals were made.

Outlook and Predictions

Analysts observed that Monday's rebound lacked strong fundamental support, with more unsettling trade news emerging throughout the day. President Trump threatened further tariff increases if foreign retaliation continued, heightening fears of a global recession. David Morrison, a senior market analyst at Trade Nation, noted that investors seemed to be re-entering long positions after Monday's dramatic volatility, potentially marking the end of the immediate selling frenzy. However, Morrison cautioned that the uncertainty surrounding the White House's tariff policies posed a significant risk.

The fluctuating expectations for Federal Reserve rate cuts have also influenced market sentiment. The interest rate swap market currently reflects expectations for at least three rate cuts this year, with the first fully priced in for June. Chicago Fed President Austan Goolsbee highlighted concerns among business leaders about tariffs disrupting supply chains and increasing inflationary pressures.

Key Stocks and Sectors

In the commodities market, oil prices stabilized after three days of declines, while gold prices rose above $3,000 but remained below last week's high of $3,167.57. Bitcoin traded just under $80,000, recovering from a five-month low of $74,445.79.

Key stocks in focus included NVIDIA Corporation(NVDA.US), with HSBC analyst Frank Lee downgrading the stock from "buy" to "hold" and lowering the target price from 175to175to120, citing uncertainties in its supply chain and pricing power. 

Tesla Motors, Inc.(TSLA.US)'s stock, predicted to have a further 43% downside due to trade policies, continued to decline. 

Morgan Stanley reduced Apple Inc.(AAPL.US)'s target price from 252to252to220, while JPMorgan lowered Alphabet's target from 220to220to180.

In other news, AIRBUS SE(EADSY.US) announced a provisional agreement with Amazon.com, Inc.(AMZN.US) to provide communication services through its planned "Kuiper" satellite constellation, and the healthcare sector saw gains as the US planned to increase payments to Medicare companies.