S&P 500 gains 1% after shedding bigger early jump as tariff uncertainty looms | World News
US stocks rose on Tuesday, but not without turbulence, as Wall Street continued to swing sharply amid ongoing doubts over whether President Donald Trump will ease his trade war. His latest round of tariffs is expected to take effect after midnight, adding to market jitters.The S&P 500 climbed 1.2% in afternoon trading, although it’s still about 17% below its record high from February. The Dow Jones Industrial Average went up 540 points, or 1.4%, 12:50 p.m. Eastern time, while the Nasdaq gained 0.9%.
Earlier in the day, global markets had rallied strongly — Tokyo’s index jumped 6%, Paris rose 2.5%, and Shanghai gained 1.6%. The S&P 500 at one point surged as much as 4.1% but later gave up most of those gains. Oil prices, which had gone up in the morning, also seesawed between small losses and gains.
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The uncertainty mostly centres around Trump’s approach to tariffs. If they remain in place for long, they could raise prices for consumers and possibly lead to a recession. However, if they’re reduced soon through negotiations, the economic damage might be limited.
“There is still hope on Wall Street that a deal can be reached,” AP reported. Trump on Tuesday said talks with South Korea’s acting president had shown promise. “Their top TEAM is on a plane heading to the US, and things are looking good,” he wrote on social media, according to AP. He added, “We are likewise dealing with many other countries, all of whom want to make a deal with the United States.”
Japanese markets led the global rally after Prime Miner Shigeru Ishiba appointed a trade negotiator to begin talks with the US, based on an agreement with Trump, Japanese officials said.
Despite the optimism, analysts are still urging caution. Sameer Samana, a senior global market strateg at Wells Fargo Investment Institute, told AP that “the key countries continue to escalate, rather than de-escalate.”Story continues below this ad
Tensions remain especially high with China, which warned of countermeasures. “China will fight to the end,” AP quoted Chinese officials as saying, following Trump’s Monday threat to raise tariffs further.
US trade representative Jamieson Greer told a Senate committee on Tuesday that Trump plans no exemptions or exclusions to the tariffs. “If you have a better idea to achieve reciprocity and to get our trade deficit down, we want to talk with you,” Greer said, according to AP.
Trump has said he wants to reduce America’s trade deficit — the difference between imports and exports — and has criticised globalisation for moving manufacturing jobs overseas.
Market experts note that big market jumps like Tuesday’s are not unusual during turbulent times. “Some of the market’s best days come during its worst periods,” the report said. For instance, during the 2008 financial crisis, the S&P 500 soared 11.6% on one day and jumped another 10.8% just weeks later.Story continues below this ad
That’s why many financial advisers caution against pulling money out of long-term investments out of fear, as doing so could mean missing out on sharp rebounds.
On Tuesday, healthcare stocks led the gains after a government announcement about higher payments for Medicare Advantage plans next year. Humana soared 9.9%, UnitedHealth rose 5.7%, and Elevance gained 2.1%.
In the bond market, yields continued to climb for a second day, with the 10-year Treasury yield rising to 4.17% from 4.15% the day before. Higher yields often signal growing confidence in the economy and expectations for inflation.
