Wall Street rallies and recovers all of Monday's slide as the dollar and US bond market steady

US stocks are rallying Tuesday after companies reported fatter profits than expected, and other U.S. investments are also steadying a day after falling sharply on worries about President Donald Trump's trade war and his attacks on the head of the Federal Reserve. The S&P 500 was 2.8% higher in afternoon trading. The Dow Jones Industrial Average was up 1,071 points, or 2.8%, as of 12:24 p.m. Eastern time, and the Nasdaq composite was 3.3% higher. Every major index has so far recovered from their sharp drop on Monday.

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The value of the US dollar also stabilized after sliding against the euro and other competitors, while Treasury yields held steadier. Sharp, unusual moves in those markets have recently raised worries that Trump's policies are making investors more skeptical that U.S. investments still deserve their reputations as the world's safest.

The only prediction many Wall Street strategists are willing to make is that financial markets will continue to jerk up and down as hopes rise and fall that Trump may negotiate deals with other countries to lower his tariffs. Otherwise, many investors expect the economy to fall into a recession. The International Monetary Fund on Tuesday slashed its forecast for global economic growth this year to 2.8%, down from 3.3%. But Vice President JD Vance also said he made progress with India's prime minister, Narendra Modi, on trade talks Monday.