After Monday’s sharp decline, stocks continued to slide on Tuesday, though at a more measured pace.
The S&P 500 suffered its worst one-day drop of the year on Monday, while the Nasdaq recorded its biggest percentage loss since September 2022. The sell-off followed President Trump’s Fox News interview over the weekend, where he declined to rule out a potential recession due to his trade policies and spoke of a “period of transition.”
Adding to concerns, new data on Tuesday revealed that US small-business confidence fell for the third consecutive month in February, erasing much of the post-election optimism from Trump’s victory in November.
Further signs of economic softening came from Delta Airlines and retailer Kohl’s, both of which issued cautious outlooks on consumer spending.
“You’re seeing all these headlines pointing to a slowdown in the US economy, so we’re not getting the typical dead cat bounce you’d expect after a major sell-off,” said Phil Blancato, chief market strategist at Osaic Wealth in New York.
“There aren’t many bargain hunters stepping in just yet… There’s still a lot of uncertainty across multiple areas, leading to a lack of institutional buying power,” he added.
While investors hope for more clarity on tariffs by early April, they are also closely watching Wednesday’s US consumer price index (CPI) data for February, which will provide insight into inflation trends.
A higher-than-expected CPI reading would add to last month’s hotter inflation data, which included the largest monthly price increase since August 2023.
As of Tuesday, the Dow Jones was down 1.4%, the S&P 500 fell 0.9%, and the Nasdaq slipped 0.4%. The MSCI World Index, a key gauge of global equities, also declined 0.9%.
Wall Street ‘Fear Index’ Soars Amid Trade War Concerns
The CBOE Volatility Index, commonly known as Wall Street’s “fear gauge,” surged 1.1% today as investor anxiety over Donald Trump’s trade war continued to rattle markets.
So far this quarter, the index has climbed 62%, putting it on track for its largest increase since the first quarter of 2020, when the COVID-19 pandemic disrupted global economies.
Gold, a traditional safe-haven asset during market turbulence, rose 1.1% to $2,916.69 an ounce. The precious metal has surged nearly 34% this year.
