US markets open higher, trying to recover from massive losses

By Ovunc Kutlu

ANKARA (AA) - US stocks opened higher Tuesday as they tried to recover from major losses during the previous session caused by concerns about China's property developer Evergrande Group and the upcoming Federal Reserve meeting.

The Dow Jones jumped 273 points, or 0.8%, to 34,244 at 9.47 a.m. EDT after the blue-chip index fell 1.8% Monday to mark its biggest single-day loss since July 19.

The S&P 500 increased 32 points, or 0.75%, to 4,390, after plummeting 1.7% in the previous session -- its worst one-day performance since May 12.

The Nasdaq added 121 points, or 0.82%, to 14,835. The tech-heavy index was off 2.19% previously.

Major risks surrounded China's second-largest property developer that has $300 billion in liabilities, that could default on its debt, which would cause millions of customers to lose deposits.

Investors have been worried amid a spillover effect to other real estate and financial markets around the world, similar to the US subprime mortgage crisis in 2007 that led to a global financial meltdown the following year.

Uncertainty was coupled by the US Federal Reserve's meeting that will conclude Wednesday as investors are worried that the central bank may signal an early rate hike in late 2022, instead of at least two hikes in 2023.

The bank's tapering, the process to reduce accumulating $120 billion of new assets on its balance sheet every month, may also be announced to start next month, instead of early 2022.

Amid risks and uncertainties, the VIX volatility index soared to 28.79 on Monday; but, the fear index as it is known, was down 10.3% to 23.05 Tuesday.

While the yield on 10-year US Treasury notes gained 0.65% to 1.318%, the dollar index was down 0.1% to 93.18.

The global cryptocurrency market lost $200 billion in a single day, but it bounced back to a certain extent with Bitcoin climbing to $43,100.

Some recovery was seen in precious metals as well, as gold was up 0.5% to $1,773 per ounce and silver added 1.2% to $22.54.

Oil prices were up with Brent crude trading at $74 per barrel with a 0.1% gain, while the US benchmark West Texas Intermediate was at $70.16 with a 0.03% increase.