NEW YORK (TheStreet) -- Global markets followed Russian assets higher as tension in the former Soviet Union calmed on Tuesday.
In his first news conference since tension began to rise, Russian President Vladimir Putin said that force was not needed in Crimea yet and would be used only as a last resort. The comments eased market fear, leading to a rebound in Market Vectors Russia ETF (RSX) and iShares JPMorgan USD Emer Mkt Bnd (EMB) after a panic selloff on Monday.
The reversal in U.S. equities signals that investors arn't ready to give up on bidding the market higher, even as indices trade at record levels.
Tesla has led the momentum stock group higher as investor excitement surged after the company's conference call last week revealed a promising future. The electric-car maker forecasted a more than 55% improvement in global sales in 2014 and unveiled plans to build a $5 billion factory in the U.S. that will allow the company to create more cars at less expense. The strong fundamentals continue to drive the company higher alongside its momentum peers.
Apple and Amazon have both lagged the broader market the past month, but they recently developed a bottoming pattern as their lower valuations attracted investors.
Investors had sold off both stocks as questions arose over the companies' revenue growth and profit expectations for this year, but the appeal of both companies' tremendous stock performance over the past few years led funds back into each.
Momentum stocks continue to lead equities higher, even at astronomical valuations. If all three companies can break out to the upside in the next few weeks, SPDR S&P 500 (SPY) and PowerShares QQQ (QQQ) could reach record highs.
Fear indicators iPath S&P 500 VIX ST Futures ETN (VXX), CurrencyShares Japanese Yen Trust (FXY) and SPDR Gold Shares (GLD) were all down on the day, signaling that investors' nerves had calmed after Monday's panic.
Investors sold stocks in all markets as the risk of war meant already fragile economies could again fall into recession if military intervention impeded growth.
Although gold fell on Tuesday, the metal has been on a steady rally higher since January as weak economic performances in China and the United States have called into question the Federal Reserve's stimulus reductions.
Continued weakness by the two economic heavyweights will keep a bid under safe-haven assets and give more reason for U.S. equities to retreat lower.
Watch how investors react to economic data over the next few weeks to determine if fear has taken the fuel out of the equity rally.
Regardless of the news, all major U.S. indices are near or above major technical resistance levels. The question now is whether the indices can hold at these prices as investors wait for a new catalyst.
At the time of publication, the author had no position in any of the stocks or funds mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.