Wall Street opened September with steep declines on Tuesday, as investor sentiment was dampened by legal uncertainty surrounding former President Donald Trump’s tariff policies following a federal appeals court decision. The ruling determined that most of the broad tariff measures were unlawful, though they will remain in effect until October 14, allowing time for a potential appeal to the Supreme Court. n nThe decision unsettled markets after the Labor Day weekend, particularly as September historically tends to be a volatile period for equities. Oliver Pursche, senior vice president and adviser at Wealthspire Advisors in Westport, Connecticut, noted that investors are now questioning whether the tariffs have damaged international trade relationships while failing to secure expected revenue. n n”It’s too early to label this the start of a major market correction,” Pursche added, pointing out that the late summer months often see increased turbulence before the typically stronger fourth quarter. Historical data supports this seasonal trend, showing September as the weakest month on average for U.S. stock performance. n nMarket participants are also awaiting the release of August’s nonfarm payrolls report, scheduled for Friday, which could influence the Federal Reserve’s upcoming monetary policy decision. According to the CME Group’s FedWatch tool, there is a 91.2% probability of a 25-basis-point rate cut at the central bank’s next meeting. n nTrading activity reflected the bearish mood: on the Nasdaq, 3,194 stocks declined compared to 1,334 that gained, resulting in a decline-to-advance ratio of roughly 2.39 to 1. The exchange recorded 95 new highs and 105 new lows. On the NYSE, falling stocks outpaced rising ones by a 3.1-to-1 margin, with 155 new highs and 49 new lows.
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S&P 500, Nasdaq down more than 1% each as ruling on Trump tariffs lifts uncertainty
NEW YORK, Sept 2 (Reuters) – Wall Street started off September on a sharply lower note on Tuesday as investors weighed the legality of President Donald Trump ‘s tariffs after a federal appeals court most of his sweeping tariffs illegal. n nA divided U.S. appeals court ruled on Friday that most of Trump ‘s tariffs are illegal, but allowed for the levies to be in place until October 14. The Trump administration can still file an appeal with the Supreme Court. n nSign up here. n nThat rattled investors on Tuesday after the long Labor Day holiday weekend, with September traditionally a weak month for equities. n nWith the ruling, “the question becomes, ‘Has the Trump administration alienated our trading partners as well as given up the revenue from tariffs? ‘ That ‘s what ‘s plaguing markets,” said Oliver Pursche, senior vice president and adviser for Wealthspire Advisors in Westport, Connecticut. n n”By the same token, it ‘s too early to call this the beginning of a great correction,” he said. “At the end of the day, we all know that August-September tend to be more volatile and a little more challenging for investors before we get into the fourth quarter, which tends to be a pretty solid one.” n nData going back decades shows that, on average, September is the worst month for U.S. stocks, and some investors are bracing for another bumpy ride this year. n nIn addition, investors are anxious to see the August U.S. nonfarm payrolls report, due on Friday. n nMarkets are pricing in about a 91.2% chance of a 25-basis-point cut in interest rates at the Federal Reserve ‘s meeting later this month, according to the CME Group ‘s FedWatch tool. n nOn the Nasdaq, 1,334 stocks rose and 3,194 fell as declining issues outnumbered advancers by about a 2.39-to-1 ratio There were 95 new highs and 105 new lows. n nOn the NYSE declining issues outnumbered advancing ones by a 3.1-to-1 ratio. There were 155 new highs and 49 new lows. n nReporting by Caroline Valetkevitch in New York; Additional reporting by Purvi Agarwal and Ragini Mathur in Bengaluru; Editing by Pooja Desai, Maju Samuel and Matthew Lewis