Markets experienced significant fluctuations on Tuesday as investors grappled with President Trump’s stance on tariffs. Stocks initially dropped during early trading sessions but managed to recover towards the end of the day. The S&P 500 index fell by 1.5 percent at its lowest point, eventually closing 0.8 percent lower. This recent selling wave has brought the S&P 500 nearly 10 percent below its mid-February record. A decline exceeding 10 percent would mark a correction milestone on Wall Street.
Tuesday’s stock downturn followed Mr. Trump’s new threats of heavy tariffs against Canada. Markets stabilized hours later after a Canadian official announced that a delegation would soon head to Washington to ease tensions between the two countries.
The tech-heavy Nasdaq Composite index fluctuated between gains and losses, closing 0.2 percent lower after a 4 percent drop on Monday. The Nasdaq is already in a correction phase.
Investors are finding it challenging to interpret the administration’s messaging on tariffs. Previously considering Mr. Trump’s more extreme tariff threats as negotiation tactics, investors are now growing concerned that they may have underestimated the risks involved in his strategy.
“Over the coming weeks, we expect further volatility and potential weakness in equity markets,” noted analysts at the Swiss bank UBS on Tuesday.
— news from The New York Times