Wall Street recovers partially with Dow Jones rallying 800 points

US stock indices rose on Tuesday amid attempts to recoup some of the hefty losses sustained yesterday as US President Trump threatened to blow away the independence of the Federal Reserve. 

The International Monetary Fund announced a major cut in its forecasted for global GDP growth in 2025, revising them downward to 2.8% from 3.3% in previous January forecasts, while cutting 2026 forecasts to 3.0% from 3.3%.

The IMF attributed the downgrade to the impact of the US tariffs, which disrupted global trade and supply chains.

The steep downgrade reflects the growing concerns about the ramifications of US trade policies, as major tensions flare with trade partners such as China and the EU, which could lead to an even slower worldwide growth.

The IMF cut US GDP growth forecast for 2025 from 2.7% to 1.8%, but still put a 40% chance of a US recession this year.

On trading, Dow Jones rallied 2.1%, or 800 points to 38,970 points, while S&P 500 rallied 2.1%, or 107 points to 5264 points, as NASDAQ jumped 2.3%, or 362 points to 16,232 points.