The U.S. stock market experienced a tumultuous day on Tuesday as uncertainty surrounding President Donald Trump’s trade war caused massive swings in the market. The S&P 500 initially surged 4.1% but quickly lost all its gains, ending the day with a 1.6% drop. The Dow Jones Industrial Average lost 320 points after erasing an earlier 1,460-point surge. The Nasdaq composite also dropped 2.1%.
Global markets experienced similar volatility, with Tokyo, Paris, and Shanghai seeing significant gains before the uncertainty set in. Trump’s trade policies have left investors grappling with the potential impact on the economy. While negotiations are still a possibility, the uncertainty remains high as Trump’s tariffs are set to escalate.
The U.S. trade representative has indicated that discussions with about 50 countries are ongoing, with an emphasis on achieving reciprocity and reducing trade deficits. Trump’s aggressive stance on tariffs and globalization has rattled industries with extensive supply chains in China, leading to losses for companies like Ralph Lauren and Best Buy.
On the positive side, health insurers saw gains following an announcement of increased Medicare Advantage payments for next year. Humana jumped 10.7% and United Health climbed 5.4%. Overall, the S&P 500 lost 79.48 points, the Dow Jones dropped 320.01 points, and the Nasdaq composite sank 335.35 points.
The bond market also saw higher yields, reflecting expectations of economic strength and inflation. The yield on 10-year Treasury bonds rose to 4.27%. Analysts warn of continued volatility in the markets as uncertainty surrounding trade policies persists.
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