US Stock Market Suffers Sharp Declines Amid Tariff Concerns

US stocks took a sharp downturn Tuesday afternoon, wiping out an initial morning surge. Hopeful anticipation of trade negotiation developments had driven markets higher that morning, but the optimism vanished once the White House announced plans to impose hefty tariffs on China. By afternoon, US stocks had firmly descended into negative territory. The Dow dropped 320 points, translating to a 0.84% decline. Meanwhile, the broader S&P 500 decrease amounted to 1.57%, and the tech-centric Nasdaq Composite fell 2.15%.

The closing figures marked the S&P 500’s lowest point in almost a year. Both the Dow and Nasdaq ended the day at their lowest levels since January 2024. These declines followed the news that President Donald Trump is poised to introduce an additional 84% levy on all Chinese imports starting Wednesday, as White House Press Secretary Karoline Leavitt revealed on Tuesday. This decision implies that every product from China will be hit with at least a 104% tariff.

Earlier, the S&P 500 and Nasdaq had surged by 4% and 4.5%, respectively, as Leavitt addressed the press, contributing to a midday slump. The Dow’s decline comes after having initially climbed as much as 3.85% earlier that day.

At its lowest point Tuesday, the S&P 500 momentarily dipped into bear market territory—defined as a downturn of 20% from its previous record high in February—before rebounding slightly to close at a decrease of 18.9% from that peak. This marked the second consecutive day that the S&P 500 flirted with bear market thresholds.

In contrast, the Nasdaq, entrenched in a bear market since last Friday, finished the day down 24.3% from its record high in December. The Dow’s closing figures reflected a 16.4% fall from its December peak.