The S&P 500 closed below 5,000 for the first time in nearly a year, reversing a strong early-session rally as hopes faded that the U.S. would delay or back down on tariffs before a midnight deadline.
The S&P 500 fell 1.6% on Tuesday, having lost $5.8 trillion in value since President Trump announced high tariffs on U.S. trading partners on Wednesday. That means the index has fallen more than 12% in four days, its biggest drop since the outbreak.
As of the close, the stock price was down nearly 19% from its all-time closing price on February 19, and was about to see a 20% sell-off, meaning a bear market is imminent. The Dow Jones Industrial Average fell 0.84% and the Nasdaq Composite fell 2.15%.
Comments:
MARK MALIK, CIO, Siebert Financial, New York
“This is not a great way to close. Even with some of the afternoon gains, we could and should have had a better close. The stock market has already priced in the impact of the trade war, and there is not enough new news to weigh on the market further to materially change what has already been priced in. There will be a lot of technical traders confused tonight.”
“But I am still slightly optimistic, which is rare for me lately. I think the administration’s body language suggests they are more inclined to negotiate, and the 104% tariff on China that we heard late in the meeting was a negotiating tactic.”
peter touzzi, president, chase investment advisors, charlottesville, va
“Early in the day, the market seemed to get some indication that the tariff issue might be resolved sooner than we thought last week. But as time went on and the news came out, that idea faded, and uncertainty about everything going forward – earnings, tariffs – increased again, and the market sold off.”
“I don’t even know how to start making (earnings) forecasts for many companies right now. … So I think it’s time to start making some assumptions about many companies and the S&P 500. “It’s a stretch to make some (earnings) forecasts for the index. “Any earnings forecast for the index could change dramatically, most likely negatively. And unless you’re comfortable with future earnings, it’s hard to value the market for many stocks.”
chris grisanti, chief market strategist, mai capital management, new york
“I find the market reaction today unsettling. Of course, we were happy to see the market perform strongly this morning, but the result is worse because it took away our joy and left us sad.”
“But it makes sense to me on a technical level because how can you really make meaningful investments at this stage when there’s so much uncertainty? I think you need a certain degree of humility to acknowledge that there’s still a lot we don’t know. I firmly believe that at this time, ‘caution’ is a better expression of caution than ‘looking for opportunities.'”
“I think it’s hard to avoid a recession even if the tariffs were removed tomorrow because I think things have become ossified, which means things are not moving forward because businesses, especially, don’t know what decisions to make. So, they’re not making any decisions. So, I think we’ve reached the point of no return.” We’ll start seeing first-quarter numbers on Friday, and I wouldn’t be surprised at all to see companies go back and forth on the guidance they gave in January. A lot of bad things can still happen in the coming weeks.”
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