Early Tuesday morning, stocks looked poised to stage a “Turnaround Tuesday” rally as tariff negotiation hopes ran high.
By the end of trading on Wall Street, those hopes had been dashed.
“At the slightest whiff of good news, people come roaring back in because that FOMO [fear of missing out] never goes away,” Interactive Brokers chief strategist Steven Sosnick told Yahoo Finance Tuesday morning as markets soared.
“It’s always there. No one ever wants to miss a rally.”
At session highs, all three of the major indexes were up more than 4%.
By the market close, all three indexes were in the red.
The benchmark S&P 500 (^GSPC) fell 1.6%, while the tech-heavy Nasdaq Composite (^IXIC) slid over 2.1%. The Dow Jones Industrial Average (^DJI) fell 0.8%, shedding 320 points. Earlier in the session, the index had been up as much as 1,300 points.
Tuesday’s closing level of 4,982 for the S&P 500 was its lowest close since April 19, 2024.
At close: April 9 at 4:56:19 PM EDT
^GSPC ^DJI ^IXIC
For the fourth straight day, tariff headlines were the market’s biggest challenge.
Near midday, the White House confirmed that tariffs on China would be increased to 104% at midnight on Wednesday as the rest of President Trump’s reciprocal tariffs go into effect.
Read more: What Trump’s tariffs mean for the economy and your wallet
Stocks erased all their gains on their day within an hour of the news and added to these losses in the final hour of the day.
This seesaw market action has been the theme of the week as markets look for some stability following the S&P 500’s worst week since March 2020, when investors grappled with the reality of Trump’s tariffs. Over last Thursday and Friday, the benchmark index lost over 10%.
On Monday, stocks ripped higher, with the S&P 500 swinging 8% higher in a 15-minute period as headlines spread that the Trump administration was considering delaying the tariffs. The White House declared that report “fake news,” sending both the S&P 500 and Nasdaq to close lower on the day.
The two days of market swings provide one clear takeaway for investors: Right now, the direction of stocks is all about tariff negotiations.
“We need to see some evidence of some negotiation very, very quickly,” Fundstrat’s global head of technical strategy, Mark Newton, told Yahoo Finance on Tuesday.
And the knee-jerk market action hasn’t just been in stocks, either.
The 10-year Treasury yield (^TNX) rose 10 basis points to hit 4.25% on Tuesday and is now up more than 25 basis points since an initial decline as investors feared Trump’s tariffs could slow economic growth, sparking a flight to safety trade into bonds.
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