S&P 500: Stock Indexes Open Higher Led by Broadcom, Apple and UnitedHealthcare

Stocks Rebound Sharply as Tariff Fears Ease and Health Insurers Surge

U.S. equities staged a strong rebound Tuesday, led by health insurers and tech names, as easing concerns over trade tariffs and a favorable Medicare ruling lifted investor sentiment.

The Dow Jones Industrial Average was up over 800 points mid-session, on track for a 1,000-point rally, while the S&P 500 and Nasdaq each gained more than 3%, bouncing from recent oversold levels.

Is Tariff Relief Fueling This Bounce?

Investor jitters around former President Trump’s tariff announcement appear to be fading, especially as markets digest the lower-than-feared inflationary impact.

Tesla gained 2% after falling sharply in previous sessions, as its limited import exposure offers a buffer against U.S.-China tariff crossfire.

Broader auto sector names including Toyota, Honda, and GM also stabilized. The broader S&P 500’s relative strength index had reached its lowest level in five years, suggesting a technical oversold condition ripe for a snapback.

Why Are Health Insurers Powering the Dow?

UnitedHealth surged more than 6% after the Centers for Medicare and Medicaid Services issued a 5.06% increase in Medicare Advantage payments for 2026, well above prior expectations. The news lifted sector peers Humana by 15% and CVS Health by 8%, adding over 200 points to the Dow. Analysts view this rate hike as a margin-boosting development for the sector, reversing recent pressure tied to higher medical utilization.

What About Rate Cut Expectations?

Treasury yields climbed as traders scaled back expectations for a May Fed rate cut. The 2-year yield jumped 11 basis points to 3.85%, while 10-year and 30-year rates also advanced. The CME FedWatch Tool now shows a 72% chance that the Fed holds rates steady next month. Market participants appear to be repricing inflation risks tied to tariff policies, potentially delaying rate relief.

Are Buybacks the Next Catalyst?

Broadcom rose 5% after announcing a $10 billion stock buyback plan, joining Apple and other tech giants that have leaned on buybacks to support shares. With recent AI investment slowing, companies may increasingly return capital to shareholders. Analysts suggest this could provide further support to equities if economic data continues to soften.

Market Outlook

Traders will now watch for hard data confirmation of a potential recession, especially after the NFIB small business index dropped sharply. With Fed action less likely near-term and inflation concerns still present, the rally’s sustainability may hinge on earnings guidance and incoming macro data. However, oversold conditions and positive sentiment in key sectors like healthcare and tech offer near-term upside potential.

More Information in our Economic Calendar.