By Yasin Ebrahim
Investing.com -- The Dow ended the day off session lows Tuesday, as a tech-fueled bounce kept losses in the broader market in check and eased the hit from a rout in energy stocks after oil prices slid on growing fears of a recession.
The Dow Jones Industrial Average fell 0.42%, or 129 points, the S&P 500 rose 0.2%, and the Nasdaq was up 1.8%
Big tech helped the broader market stage a late-day bounce off session lows as dip-buying in megacap tech stocks Alphabet (NASDAQ:GOOGL) and Meta Platforms (NASDAQ:META) led the gains despite Barclays warning of a “perfect storm” in digital advertising amid rising competition and slowing digital-ad spending.
Semiconductor stocks also ended the day positive as a surge in Nvidia (NASDAQ:NVDA) and Advanced Micro Devices Inc (NASDAQ:AMD) helped improve sentiment on chip stocks in the wake of Micron Technology's (NASDAQ:MU) recent quarterly results that flagged headwinds for chip demand.
The inversion in a key part of the Treasury yield curve that stoked recession concerns reversed in late-day trading to help lift sentiment. The 2-year Treasury bond briefly jumped above the yield on the 10-year Treasury note, marking a key inversion in the yield curve that usually signals trouble on the horizon for the economy.
Recession fears have been gaining momentum following the Atlanta Fed’s GDP forecast, calling for a 2% decline in the second quarter. Following the 1.6% decline reported first quarter GDP, another decline would place the economy in a technical recession.
“As investors return from the 4th of July holiday, sentiment remains uneven as market participants continue to ping pong between fears of recession and concerns over too high inflation,” Stifel said in a note.
Energy stocks were the biggest drag as oil prices slipped more than 8% on bets that recession would weigh on energy demand.
Halliburton (NYSE:HAL), APA (NASDAQ:APA), Hess Corporation (NYSE:HES) were among the top decliners falling more than 6%, while Occidental Petroleum (NYSE:OXY) fell more than 2% even as Warren Buffet’s Berkshire Hathaway (NYSE:BRKa) increased its stake in the latter to 17.4%.
The slump in Treasury yields weighed on bank stocks, with just over a week to go until major Wall Street banks kick off the quarterly earnings season. JPMorgan (NYSE:JPM) is set to report results on July 14.
As the fears of recession mounted, growth corners of the market including consumer stocks were the outperforming sectors on expectations that the Fed may not deliver aggressive interest rate hikes to bring inflation under control.
Norwegian Cruise (NYSE:NCLH), Dollar Tree (NASDAQ:DLTR), Caesars Entertainment (NASDAQ:CZR) were outperforming, with the latter up more than 9%.
In other news, Ford Motor (NYSE:F) fell 1% after reporting that sales rose 1.8% to 483,688 new vehicles in the second quarter from a year earlier, below estimates for a gain in a range of 3.3% and 5.1%.