STORY: Wall Street's main indexes closed higher on Tuesday, with the Dow gaining about four-tenths of a percent, the S&P 500 adding a quarter of a percent and the Nasdaq rising rougly six-tenths of a percent.
The bounceback from Monday's selloff coincided with bond yields easing and a rebound in bitcoin, which a day earlier suffered its largest dollar loss since May of 2021.
Investors' focus shifted toward the Federal Reserve, with traders' expectations for a December rate cut at nearly 90%, according to CME's FedWatch Tool.
Still, inflationary fears remain, says George Goncalves, U.S. Head of Macro Strategy at MUFG Securities.
"So inflation in the early part of 2026 has some risks of rising. If you recall, going back to the beginning of this year, there was a lot of inventory front-running ahead of the tariffs. There was kind of lower comps in terms of overall inflation. And there hasn't been a clear pass-through yet completely of all the sort of price rises that have happened as a result of the tariffs. So we do think that on the core goods part of the inflation basket, we do think that there's still some residual inflation catch up that has to happen. It probably takes place in the first few months of the year."
Stocks on the move Tuesday included Boeing, which soared 10%, giving the Dow its biggest boost, after the planemaker forecast higher deliveries for its 737 and 787 jets next year.
Bitcoin's rebound lifted crypto stocks, including Strategy, which gained nearly 6%.
And shares of American Eagle jumped 15% in extended trading after the company raised its annual sales forecast, thanks in part to a controversial ad campaign featuring actress Sydney Sweeney.
