New York
CNN
—
US markets seesawed Tuesday amid another tariff roller coaster ride.
All three major indexes dropped after President Donald Trump doubled down early Tuesday on his threat to levy a new round of hefty tariffs on Canada. Yet by the afternoon, markets had pared some losses as officials from both the US and Canada said they would meet this week to deescalate tensions and renegotiate trade policy.
The Dow closed lower by 478 points, or 1.14%, after tumbling more than 700 points earlier. The broader S&P 500 fell 0.76% and the Nasdaq Composite fell 0.18%.
The S&P 500 flirted with correction territory and closed down 9.3% from its record high in February, nearing a correction. The Nasdaq, which has been in correction territory, closed down 13.6% from its record high in December.
Trump did not appear to be concerned by the market’s decline.
“Markets are going to go up and they’re going to go down but, you know what, we have to rebuild our country,” he told reporters at the White House.
“This market is just blatantly sick and tired of the back and forth on trade policy,” Art Hogan, chief market strategist at B. Riley Wealth Management, told CNN’s Matt Egan.
“It feels as though the administration continues to move the goal posts. With that much uncertainty, it’s impossible for investors to have any confidence,” Hogan said.
Wall Street’s fear gauge, the Cboe Volatility Index, or VIX, fell after climbing earlier Tuesday. The index on Monday had an intraday surge of 19% and closed at its highest level since December.
The decline in the three major indexes extends a market rout that has rattled Wall Street and raised concerns about when the bleeding will stop.
Trump has cautioned that tariffs could cause “a little disturbance,” and Commerce Secretary Howard Lutnick said last week that “the fact that the stock market goes down half a percent or percent, it goes up half a percent or percent, that is not the driving force of our outcomes.”
“There’s a tolerance for pain that maybe some investors hadn’t priced in,” said Ross Mayfield, an investment strategist at Baird.
White House Press Secretary Karoline Leavitt in a press briefing Tuesday reiterated comments by Trump that the US is in “a period of economic transition.” Asked about the declines in the market, Leavitt said they are a “snapshot of a moment in time.”
“The president will look out for Wall Street and for Main Street just like he did in his first term, and people on Wall Street and Main Street should bet on this president. He’s doing what’s right for this country,” Leavitt said.
“The American people gave the president a tremendous opportunity to restore American greatness and restore our manufacturing dominance, and he’s intent on doing just that,” she added.
Wall Street’s volatility comes on the heels of a steep selloff on Monday that saw the Dow tumble 890 points and the S&P 500 shed 2.7%.
Trump in an interview with Fox News on Sunday had declined to rule out the possibility of a recession, contributing to investor anxiety. Trump told reporters Tuesday that the market selloff does not “concern” him and that he “doesn’t see” a recession.
Among the stocks dragging markets lower on Monday were airlines. Delta Airlines (DAL) slid 7.25% after the company on Monday slashed its earnings forecast for the year. American Airlines (AAL) fell 8.3% and United Airlines (UAL) fell 2%.
Elsewhere, Ford (F), one of the most actively traded stocks Tuesday, slid 2.7%.
“Extreme fear” has been the sentiment driving investors for the past two weeks, according to CNN’s Fear and Greed Index, stoked by the uncertainty caused by Trump’s back-and-forth tariff announcements.
European stocks slumped as the anxiety around Trump’s tariffs spread to global markets. The pan-European STOXX Europe 600 index fell 1.7%. Germany’s DAX and France’s CAC indexes were each 1.3% lower on the day, while London’s FTSE 100 was down 1.2%.
