The CNN Money Fear and Greed index showed a further easing in the fear level, while the index remained in the “Fear” zone on Tuesday.

U.S. stocks settled higher on Tuesday, with the S&P 500 jumping over 1% on Christmas Eve. Shares of Tesla Inc ( TSLA ) gained more than 7%, while Nvidia Corp ( NVDA ) edged higher by 0.4% during the session.

The New York Stock Exchange closed early Tuesday for Christmas Eve and was also shut on Wednesday for Christmas Day.

On the economic data front, the U.S. Redbook index increased 5.9% year-over-year in the latest week, following a prior reading of a 4.8% gain. The composite manufacturing index in the U.S. Fifth District increased to -10 in December compared to a reading of -14 in the previous month.

All sectors on the S&P 500 closed on a positive note, with consumer discretionary, financial, and information technology stocks recording the biggest gains on Tuesday.

The Dow Jones closed higher by around 390 points to 43,297.03 on Tuesday. The S&P 500 rose 1.10% to 6,040.04, while the Nasdaq Composite surged 1.35% at 20,031.13 during Tuesday's session.

What is CNN Business Fear & Greed Index?

At a current reading of 34, the index remained in the “Fear” zone on Tuesday, versus a prior reading of 29.6.

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

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