Stock market today: Indexes jump as traders try to rebound from Monday's losses

"The economy will chug along and we probably won't see a recession," Goldman Sachs CEO David Solomon said on Tuesday.

• US stocks jumped on Tuesday, rebounding from Monday's sharp decline.
• The S&P 500 and Nasdaq 100 rose 1%, driven by investor fears of a potential recession subsiding.
• The CBOE Volatility Index plunged 29%, signaling that investors were buying the dip.

Investors were whiplashed Tuesday as stocks rebounded following Monday's sharp decline.

The S&P 500 and Nasdaq 100 jumped about 1% in Tuesday's trading session, as investors grappled with whether the unwind of the yen carry trade was a short-term technical factor.

Concerns of an imminent recession following the trigger of the Sahm Rule last week were dismissed by the inventor of the rule, former Fed official Claudia Sahm, who told Business Insider that the surge in the unemployment rate is being driven by an increase in labor supply rather than a decrease in labor demand.

"The US economy is still growing. We are still adding jobs. We are spending even after inflation," Sahm said.

Meanwhile, Wall Street strategists said that the current decline in the stock market, with the S&P 500 being down about 8% since its July record on Monday, is completely normal.

"While such sharp declines in equity prices are concerning, looking back at historic data on the S&P 500 index reminds us that dips, pullbacks and corrections of 10% or more are a normal and healthy part of any bull market. On average, stocks experience a pullback of over 5% over three times per year and a correction of 10% or more around once per year — even in positive years," LPL portfolio strategist George Smith said.

The CBOE Volatility Index, better known as the VIX, plunged 29% on Tuesday. That decline signals that investors are using the past week's stock market decline as an opportunity to buy stocks.

The gains on Tuesday were broad-based, with four sectors printing gains of about 2% or more. Shares of Nvidia and Meta Platforms surged about 4%, while Eli Lilly and Berkshire Hathaway jumped about 2%.

Goldman Sachs CEO David Solomon swatted down the idea of emergency interest rate cuts from the Federal Reserve, as he doesn't see an imminent recession on the table.

"I don't expect that you'll see anything before September," Solomon said of a Fed interest rate cut. "The economy will chug along and we probably won't see a recession."

Here's where US indexes stood at the 4:00 p.m. closing bell on Tuesday:

• S&P 500: 5,240.03, 1.04%
• Dow Jones Industrial Average: 38,997.66, up 0.76% (+294.39 points)
• Nasdaq composite: 16,366.85, up 1.03%

Here's what else happened today:

• Bank of America strategist Savita Subramanian said the S&P 500 is unlikely to enter a bear market anytime soon.
• These are the sectors and stocks investors should consider buying during the current stock market volatility, according to BofA.
• Top economist Mohamed El-Erian said an emergency interest rate cut from the Fed would be a mistake.
• Vice President Kamala Harris selected Minnesota Governor Tim Walz as her running mate for the upcoming Presidential election.

In commodities, bonds, and crypto:

• West Texas Intermediate crude oil rose 0.33% to $73.18 a barrel. Brent crude, the international benchmark, increased 0.21% to $76.46 a barrel.
• Gold was lower by 0.65% to $2,428.40 per ounce.
• The 10-year Treasury yield rose 9 basis points to 3.89%.
• Bitcoin jumped 4.80% to $56,626.