Wall Street expects a “turnaround” in the stock market after the biggest sell-off in two years

The S&P 500 rose 1.1 percent in the first hour of trading on Tuesday.

The tech-heavy Nasdaq also began to recover, rising 0.7 percent as of 10:30 a.m.

Both indexes fell 3 percent on Monday during a global stock sell-off.

Fears of a US recession were responsible for Monday’s stock market plunge.

But according to JPMorgan, another factor also played a major role: the liquidation of the so-called “carry trades.”

A carry trade is when an investor borrows money in a currency with low interest rates. This has been happening with global investors borrowing in Japan, where interest rates were very low compared to most countries such as the UK and the US.

But the Japanese yen has gained 11 percent against the dollar in the past month after it became clear that the Japanese central bank was going to raise interest rates.

This meant that investors had to unwind those carry trades.

“We’re not done at all,” said Arindam Sandilya, co-head of global currency strategy at JPMorgan. Bloomberg Television.

‘The dismantling of the carry trade, at least within the speculative investor community, is 50%-60% complete.’

Shark Tank star Kevin O’Leary gives his fascinating verdict on Monday’s stock market crash, in an exclusive interview with DailyMail.com.

A financial author and stock market analyst now says the Federal Reserve will be forced to initiate an emergency rate cut before its next meeting in September to stem the sell-off in stocks of recent days.

Robert Prechter, founder and president of Elliott Wave International, joined Neil Cavuto on Fox Business Monday night and said the Fed missed a huge opportunity at its meeting last week to get ahead of the market calamity that continues to unfold.

“I think there will be a surprise rate cut before the September meeting because I think rates have started to fall faster,” he said.

The last time the Federal Reserve made emergency rate cuts was during the early days of COVID, and many experts believe that won’t happen again now because it would be a sign that the US economy is in dire shape, possibly sparking even more fears in the market.

In January, Prechter warned that it was dangerous to have too much optimism in the market. On Monday, he said that optimism is now “entrenched” and that the world is witnessing “the most overextended market in history.”

Bitcoin rose 0.6 percent to $54,734, rebounding from a near six-month low of $49,445 hit on Monday.

Apple is having another rough start to the day, with shares down more than 3 percent in the first half hour of trading.

Shares of the tech giant fell more than 6 percent on Monday after Warren Buffet’s Berkshire Hathaway halved its stake in the company, following news that it had lost a federal antitrust lawsuit.

US stocks rose slightly on Tuesday morning after Monday’s sell-off.

The S&P 500 rose 0.5 percent in the first 15 minutes of trading, but began to fall again.

The tech-heavy Nasdaq rose 0.7 percent.

Both indexes fell 3 percent on Monday in a painful day for investors.

The S&P 500 was up slightly when markets opened in New York at 9:30 a.m.

Global stocks rose in choppy trading on Tuesday as uncertainty following the previous day’s aggressive sell-off weighed on investor sentiment, even though central bank officials said all the right things to calm nerves.

The Nikkei’s 10 percent overnight surge in Tokyo brought an initial sense of relief after the index’s 12.4 percent plunge on Monday, its biggest daily sell-off since the Black Monday crash of 1987.

European markets were mixed, with the pan-regional STOXX 600 index bouncing between a 0.4 percent daily loss and a 1 percent gain, while U.S. stock futures remained volatile.

S&P 500 futures rose 1 percent, having turned toward the zero level earlier, while Nasdaq futures rose 1.2 percent.

The S&P 500 lost 3 percent on Monday, while the Nasdaq fell 3.43 percent, extending a recent sell-off as fears of a possible U.S. recession spooked global markets.

European stock markets steadied on Tuesday after Asian indices enjoyed some rebounds following a global slump fueled by fears of a US recession.

Tokyo, which suffered a record loss on Monday, led gains to close more than 10 percent higher as traders snapped up shares hit by a disastrous start to the week for markets.

But analysts warned there was likely to be more volatility ahead, even as Europe’s major stock markets, which had fallen much less sharply on Monday than their Asian peers, steadied on Tuesday.

Monday’s sell-off followed data on Friday showing fewer U.S. jobs were created last month than expected, while another report pointed to continued weakness in the manufacturing sector.

This led to warnings that the US Federal Reserve had kept rates at more than two-decade highs for too long and risked causing a recession.

Meanwhile, speculation has been rife in the market that the US central bank could carry out an emergency interest rate cut ahead of an expected reduction next month.