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US stocks tried to rebound on Tuesday – one day after Chinese real estate giant Evergrande sent Wall Street into turmoil over fears its $300 billion debts sparked fears of a Lehman Brothers-style collapse.

But the Dow Jones closed in the red, losing 50.63 points, or 0.1%.  The S&P 500 shed about 0.1%, following its worst day since May. However, the Nasdaq Composite rose 0.2% as investors bought some major tech shares. 

The closing bell was in sharp contrast to opening, where the Dow opened up 208 ponts, and the S&P rose 16.77 points.   

All three indexes plunged Monday, with the Dow Jones losing a staggering 614.41 points, or 1.8 percent, for its biggest one day drop since July 19.  

The S&P 500 recorded its worst day in more than four months after all 11 of the index’s major sectors plunged.

Overall it was down 1.7 percent, marking its worst day since May 12. 

The Nasdaq also fell 2.2 percent to its lowest level in about a month. 

All three indexes list the share prices of America’s largest publicly traded companies.  

The Dow Jones is a listing of the 30 most traded stocks on the New York Stock Exchange. 

The S&P 500 includes the 500 largest US publicly traded companies across 11 sectors, while the Nasdaq is made up of more than 2,500 stocks. 

As such, an increase in the total value of the index is seen as indicative of a healthy economy, while slumping prices are taken as a sign of potential economic trouble.

This came after Evergrande, China’s second largest property developer, looked poised to default on its multi-billion dollar debt burden. 

The firm has warned for months it does not have enough case to pay off its and its share price has plummeted 80 percent this year.

Construction materials industries have also started to see their share prices drop amid fears the implosion of Evergrande would lead to a collapse in demand for their goods.

Experts warned that the crisis has echoes of the Lehman Brothers bankruptcy which sent the global and economy credit markets to collapse back in 2008.

Lehman crumbled due to the subprime mortgage crisis, which saw lower income Americans sold mortgages they became unable to repay.

China is unlikely to let Evergrande collapse. The firm accounts for around two per cent of the communist country’s Gross Domestic Product (GDP) – the value of all goods and services it produces.

President Xi Jinping’s government will likely step in to bail Evergrande out should it ultimately default on its debts.  

These concerns added to the volatility markets are already facing due to ongoing concerns around the COVID-19 pandemic and sluggish economic growth – fueling a broad sell-off and sending investors fleeing equities for safety Monday. 

Investors tried to shake off these fears of a collapse Tuesday, buying the dip and pushing up the indexes. 

Buying the dip is when investors buy up shares at a lower rate after stocks fall. This then pushes the value up again. 

Technology companies showed particular signs of growth Tuesday, making up some ground on the previous day’s pullback.

Uber jumped 7.6 percent after the ride-hailing app raised its outlook for the third quarter. 

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Commodities also showed signs of stabilizing Tuesday with benchmark US crude up $1.04 to $71.33 a barrel. 

Brent crude, the international standard, added $1.21 to $75.13 a barrel.

Meanwhile, Johnson & Johnson announced Tuesday that the booster shot for its COVID-19 vaccine has been found to be 94 percent effective.

This boosted the company’s shares by .5 percent and helped to appease fears around the Delta variant.  

This comes ahead of a Federal Reserve meeting on monetary policy. 

The two-day meeting, which kicks off Tuesday, is being watched closely to see if Fed Chairman Jerome Powell will take any action to address the impact of rising prices on businesses and consumers. 

The Fed will release its quarterly economic forecasts and statement on interest rates 2pm ET Wednesday, followed by a press conference.  

Global markets also rose back to power, with European markets higher and Asian markets mostly up. 

Hong Kong’s Hang Seng Index rose 0.5 percent following its 3 percent dip Monday, while Chinese markets remained closed for a holiday. 

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