Stocks gave up an early rally and briefly went negative as big swings rocked Wall Street again on Tuesday.
The S&P 500 erased nearly all of a four per cent gain by early afternoon and was up just 0.4 per cent. The Dow Jones Industrial Average was up 300 points, or 0.8 per cent, and the Nasdaq composite was near the break-even point at 0.2 per cent higher as of 1:45 p.m. ET.
The S&P/TSX Composite Index was down 0.8 per per cent early in the afternoon as well.
Stocks globally had rallied even more earlier in the day, with indexes up six per cent in Tokyo, 2.5 per cent in Paris and 1.6 per cent in Shanghai amid hopes that U.S. President Donald Trump might ease up on his trade war following negotiations with other countries. Trump’s latest set of tariffs are scheduled to kick in after midnight.
Less than a week after Trump unleashed sweeping reciprocal tariffs that sent world markets into a tailspin, the mood remains fragile.
The CBOE Volatility Index (VIX) — seen as Wall Street’s “fear gauge” — retreated to 38.59 points after rising on Monday to its highest level since last August. A figure over 30 is still generally considered a sign of high volatility.
Markets in Asia, Europe and North America posted gains on Tuesday after days of losses following U.S. President Donald Trump’s announcement of global tariffs. Meanwhile, China vowed to ‘fight to the end,’ and initiated dispute consultations with the World Trade Organization.
In the bond market, U.S. Treasury yields rallied for a second straight day to recover more of their sharp losses from prior months. The yield on the 10-year Treasury rose to 4.2 per cent midday Tuesday, from 4.15 per cent late Monday and from just 4.01 per cent late Friday.
The U.S. dollar, which has taken a beating from the tariff turmoil, remained weak against other major currencies. Safe-haven currencies, including the yen and the Swiss franc, held near six-month highs to start Tuesday.
World markets get some reprieve
While fragility remains, world markets saw some reprieve on Tuesday after three days of heavy selling.
In Europe, shares rose from 14-month lows, with Paris seeing a 3.5 per cent gain. The price of crude oil also pulled higher after touching its lowest level since 2021 on Monday.
The European Commission — set to face 20 per cent tariffs from the U.S. as of Wednesday — said Monday it had offered a “zero-for-zero” tariff deal to avert a trade war with the United States. The commission proposed counter-tariffs of 25 per cent on a range of U.S. goods, including soybeans, nuts and sausages, although other potential items like bourbon whisky were left off the list, a document seen by Reuters showed.
Japan’s blue-chip Nikkei stock index closed six per cent higher, with U.S. Treasury Secretary Scott Bessent tasked with leading trade…
Read More: North American markets see an early rise, then drop as uncertainty
