U.S. stock markets endured a turbulent session on Tuesday as investors grappled with renewed tariff threats from President Donald Trump. The major indexes initially plunged before recouping some losses later in the day as U.S. and Canadian officials announced plans to negotiate trade tensions.
The Dow Jones Industrial Average closed down 478 points, or 1.14%, after earlier dropping over 700 points. The S&P 500 slid 0.76%, while the Nasdaq Composite edged down 0.18%. With the S&P 500 now 9.3% below its February peak, the index is teetering on the edge of correction territory. The Nasdaq, already in correction mode, has declined 13.6% from its December high.
Despite the market turmoil, Trump downplayed concerns. “Markets go up and down, but we have to rebuild our country,” he remarked from the White House.
Investor Frustration Mounts
The uncertainty surrounding U.S. trade policy has left Wall Street on edge. “This market is blatantly sick and tired of the back-and-forth on trade policy,” said Art Hogan, chief market strategist at B. Riley Wealth Management. He criticized the administration’s shifting stance, arguing that it has made it nearly impossible for investors to maintain confidence.
The Cboe Volatility Index (VIX), often referred to as Wall Street’s “fear gauge,” fluctuated sharply throughout the day. On Monday, it surged 19% intraday, closing at its highest level since December.
Ross Mayfield, an investment strategist at Baird, suggested that investors may not have fully priced in the economic disruption tariffs could cause. “There’s a tolerance for pain that maybe some investors hadn’t expected,” he noted.
White House Stands Firm Amid Market Selloff
Despite the sharp market declines, the White House remained resolute. Press Secretary Karoline Leavitt emphasized that the U.S. economy is undergoing a “period of transition,” insisting that the president remains committed to both Wall Street and Main Street.
“The president will look out for both,” she said, urging confidence in his economic strategy.
Trump’s comments over the weekend, where he declined to rule out the possibility of a recession, have further unsettled investors. His remarks contributed to Monday’s sharp selloff, where the Dow plummeted 890 points and the S&P 500 lost 2.7%.
Sectors Hit Hard as Global Markets React
Airline stocks led the downturn, with Delta Airlines (DAL) tumbling 7.25% after slashing its earnings forecast. American Airlines (AAL) fell 8.3%, while United Airlines (UAL) declined 2%. Ford (F), one of the day’s most actively traded stocks, slipped 2.7%.
The uncertainty surrounding U.S. trade policy extended beyond Wall Street, triggering selloffs in European markets. The STOXX Europe 600 fell 1.7%, while Germany’s DAX and France’s CAC each lost 1.3%. The UK’s FTSE 100 declined 1.2%.
Investor Sentiment Deteriorates
CNN’s Fear and Greed Index has remained in “extreme fear” territory for two weeks, reflecting investor unease over the unpredictable trade environment.
With volatility gripping Wall Street and global markets reacting to the uncertainty, investors are left wondering how long the turbulence will persist.
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