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The S&P 500, the biggest tracker of US equities, fell sharply on Tuesday, dropping below 5,000 points for the first time in nearly a year.
The market first rose strongly in the morning but then reversed course when it became clear there would be no delays to new tariffs set to begin at midnight.
The Standard and Poor’s 500, or simply the S&P 500, is a stock market index tracking the stock performance of 500 leading companies listed on stock exchanges in the United States.
Since President Donald Trump announced heavy new taxes on imported goods last Wednesday, the S&P 500 has lost $5.8 trillion in value. The market has dropped more than 12% in just four days – the biggest four-day drop since the COVID pandemic.
Investors had been hopeful on Tuesday morning, pushing the market up by more than 4%, thinking that Trump might soften his approach or push back the April 9 deadline for new tariffs.
Those hopes were crushed when White House press secretary Karoline Leavitt announced that Trump expects the tariffs to go into effect as planned, even though nearly 70 countries have reached out to negotiate.
The White House confirmed that 104% tariffs on Chinese goods will start on April 9. Earlier, China had stated it would never accept what it called the “blackmail nature” of Trump’s threat to more than double tariffs on Chinese imports.
Adding to market concerns, U.S. Trade Representative Jamieson Greer said exemptions to these global tariffs aren’t expected anytime soon.
The S&P 500 is now almost in a “bear market” – nearly 19% below its record high from February 19. A bear market is officially declared when the market falls 20% from its peak.
By the end of Tuesday, the S&P 500 dropped 79.48 points (1.57%) to close at 4,982.77. The Dow Jones fell 320.01 points (0.84%) to 37,645.59, and the Nasdaq lost 335.35 points (2.15%), ending at 15,267.91.
The market’s “fear gauge” – the CBOE Volatility Index – closed at its highest level since March 2020, showing that investors are extremely nervous about what’s coming next.
