NEW YORK – Tuesday saw a quieter day on Wall Street, marked by subtle gains following significant gains on Monday, fueled by optimism that President Donald Trump’s proposed tariffs may not be as extensive as initially predicted.
The S&P 500 ticked up 0.2% after a 1.8% surge on Monday, marking one of its best performances over the past year. Meanwhile, the Dow Jones Industrial Average nudged upwards by 4 points, less than 0.1%, and the Nasdaq composite climbed 0.5%.
U.S. stocks have been recovering from a recent dip that saw them fall 10% from their peak, signaling the first “correction” since 2023. Currently, the S&P 500 is down 6% from its record highs, making the market appear less pricey—a criticism it had faced after previous euphoric increases.
However, financial experts caution that further volatility is expected, with an impending deadline on April 2, dubbed “Liberation Day” by Trump. That day is set for the launch of tariffs on trade partners to balance what he perceives as uneven trade burdens imposed on the United States. Monday’s market surge was buoyed by hopes that the tariffs may be more focused than initially feared.
Ajay Rajadhyaksha, global head of research at Barclays, mentioned that the risk of a tariff shock should not be underestimated in early April. He highlighted the outlook for stock market volatility and noted that currencies like the Mexican peso and Canadian dollar have not significantly weakened, despite previous tariff delays.
Even if Trump’s tariffs result in less economic disruption than feared, the ongoing discussions have already dented confidence among U.S. consumers and businesses. This decreased confidence could lead to cuts in spending and potentially stall economic growth.
A recent report pointed to increasing pessimism among U.S. households. The Conference Board’s measure of consumer confidence dropped more than expected, primarily due to downgraded expectations for near-future conditions. This measure has reached its lowest point in 12 years, falling below the 80 mark, often associated with impending recessions.
The survey, along with others, indicates that Americans are particularly anxious about the future economic landscape while current economic activity and the job market remain resilient, despite negative sentiments from companies and consumers.
On the corporate front, Trump Media & Technology Group saw its stock increase by 8.9% after announcing a partnership with Crypto.com to develop “America-First” investment funds. These exchange-traded funds (ETFs) will include bitcoin and other digital assets along with American-focused securities across various industries, with Crypto.com providing technological support and cryptocurrency for these ETFs, operating under TMTG’s Truth.Fi brand.
Tesla’s stock climbed 3.4% after fluctuating between minor gains and losses, despite dismal sales figures from Europe. The stock, however, is still down nearly 29% for the year. Tesla’s European electric car sales fell by almost half in the first two months of the year compared to the previous year, despite an overall growth in the battery-powered vehicle market, according to the European Automobile Manufacturers Association.
Tesla faces challenges like an aging vehicle line, CEO Elon Musk’s controversial political alignments, and increased competition from Chinese manufacturers like BYD.
KB Home shares dropped 5.2% after announcing lower-than-expected quarterly profits and revenue. The homebuilder sector, already struggling, might encounter rising costs due to tariffs, potentially inflating prices for buyers. A Tuesday report indicated that U.S. new home sales were slightly below economists’ forecasts.
Overall, the S&P 500 increased by 9.08 points to 5,776.65. The Dow Jones Industrial Average rose 4.18 points to 42,587.50, and the Nasdaq composite advanced 83.26 points to 18,271.86.
Internationally, stock indexes rose in many European markets following a mixed outcome in Asian markets.
In bond markets, Treasury yields saw a decline. The yield on the 10-year Treasury note decreased to 4.31% from 4.34% late Monday.