05:01 PM EDT, 08/06/2024 (MT Newswires) -- US benchmark equity indexes closed higher Tuesday following steep losses in the previous two sessions, while Treasury yields saw sizable gains.

The S&P 500 and the Nasdaq Composite rose 1% each to 5,240 and 16,366.9, respectively, while the Dow Jones Industrial Average advanced 0.8% to 38,997.7. All sectors posted gains, led by real estate.

Stock markets saw sharp declines on Friday and Monday, triggered mainly by a weaker-than-expected US jobs report for July. The report, released Friday, stoked recession fears.

The market has priced "aggressive" cuts in interest rates by the Federal Reserve following recent jobs data, Morgan Stanley said in a Tuesday note to clients. "We maintain a call for (75 basis points) of cuts this year on a view that the economy is not slumping."

The US 10-year yield jumped 11.7 basis points to 3.9%, while the two-year rate soared 10.6 basis point to 3.99%.

San Francisco Fed President Mary Daly said she's "more confident" that inflation in the US is headed toward the Federal Open Market Committee's 2% target, Reuters reported Monday. "It's clear inflation is coming down closer to our target," Daly reportedly said.

In company news, Kenvue ( KVUE ) shares jumped nearly 15%, the best performer on the S&P 500, after the company's second-quarter financial results topped Wall Street's views.

Uber Technologies ( UBER ) was the second-top gainer on the S&P 500, up 11%, after the ride-hailing company logged stronger-than-expected gains in second-quarter results amid robust demand.

Caterpillar ( CAT ) shares rose 3%, the best performer on the Dow, after the heavy equipment manufacturer's second-quarter earnings unexpectedly rose year over year while revenue fell. The company lowered its full-year revenue expectations.

Henry Schein (HSIC) saw the steepest decline on the S&P 500, down 8.1%, as the company lowered its full-year earnings outlook following a second-quarter revenue miss.

West Texas Intermediate crude oil fell 0.1% to $72.88 a barrel.

In economic news, the US trade deficit narrowed less than projected in June even as export growth outpaced an increase in imports, according to government data.

Gold fell 0.6% to $2,429.20 per troy ounce, while silver decreased 0.5% to $27.07 per ounce.