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Stocks moved higher on Tuesday as the market attempted to recover from its worst week since March 2020, despite the fact that investors widely remain nervous about surging inflation and rising rates leading to a recession.


Stocks bounced back somewhat after a heavy week of losses: The Dow Jones Industrial Average rose 2.1%, over 600 points, while the S&P 500 gained 2.6% and the tech-heavy Nasdaq Composite 3%.

Markets are coming off of their worst weekly performance since March 2020, with the S&P 500 falling nearly 6% last week as investors worry that aggressive rate hikes from the Federal Reserve will hurt economic growth.

Experts have increasingly been warning that the Fed won’t be able to achieve a soft landing and will instead plunge the economy into a recession as it scrambles to raise interest rates further in an effort to combat 41-year-high inflation.

“At least equity markets are kicking off the week on a positive note,” says Bespoke Investment Group, adding, “Obviously, where we end up today is an entirely different story. . . it doesn’t take much to erase a market rally these days.”

Morgan Stanley chief US equity strategist Mike Wilson told CNBC that he puts the odds of a looming recession at 50%, predicting that markets will have a “really hard time” with stocks set to fall by another 15% to 20% if a downturn happens .

Consumer stocks were among the best-performing sectors of the market on Tuesday—with some airline stocks rallying on hopes for a rebound in summer travel, while energy stocks also jumped thanks to a surge in oil prices.