Stocks Up in Late Hours on Hints of Tariff Relief: Markets Wrap
(Bloomberg) — Stocks climbed in late hours after US Commerce Secretary Howard Lutnick suggested that there may be some tariff relief after a selloff that shook markets around the globe.
Frantic moves lashed markets all day, both up and down, as sentiment shifted quickly amid uncertainty around Donald Trump’s trade war. US shares were particularly volatile, first plunging, then recovering, and falling anew at session’s end. After the close, word Trump was considering a compromise with Mexico and Canada sparked a late-day rally, with a $611 billion exchange-traded fund tracking the S&P 500 (SPY) signaling a rebound.
The US could announce a pathway for tariff relief on Mexican and Canadian goods covered by North America’s free trade agreement as soon as Wednesday, Lutnick told Fox Business. He added that tariffs would likely land “somewhere in the middle,” with Trump “moving with the Canadians and Mexicans, but not all the way.”
From New York to London and Tokyo, equities sank Tuesday — with the S&P 500 returning to pre-election levels on concerns about the impacts of a trade war on the economy. The US imposed the largest set of new tariffs in nearly a century, slapping levies on a broad swath of goods from China, Canada and Mexico that spurred swift reprisals.
The moves — before President Donald Trump’s address Tuesday night to Congress — mark a new phase in his broadening economic and diplomatic reset of America’s place in the world. Treasury Secretary Scott Bessent projected confidence in the tariff plans — even as the stock market slumped.
If Wall Street learned one thing during Trump’s first term as president, it’s that the stock market is a way he keeps score. The theory was that the president’s penchant for using equities as a report card meant any policy that rattled markets would cause him to revise the plans. But with stocks tanking, investment pros started to question if there’s a “Trump Put” after all.
“Where’s the Trump Put?” said Tom Essaye at The Sevens Report. “At what level of stock market ‘pain’ would Trump and the administration reverse course? Obviously, we don’t know the exact number, but if we look back at Trade War 1.0, history implies the ‘Trump Put’ would be elected around a 10% decline in the S&P 500.”
To Nancy Tengler at Laffer Tengler Investments, while it’s “always excruciating” to be in the middle of a market correction — this is essentially what she think is currently happening. The S&P 500 has now dropped about 6% from its record high.
“This time, of course, it’s spurred by the tariffs,” she noted. “And I think we have to analyze not just what the tariffs will be, but how long we think they’re going to last. If it is short lived, this is just an opportunity to buy stocks for the long term.”
The S&P 500 fell 1.2%. The Nasdaq 100 lost 0.4%. The Dow Jones Industrial Average sank 1.6%. A gauge of the Magnificent Seven megacaps dropped 0.7%. The Russell 2000 slipped 1.1%.
The yield on 10-year Treasuries rose nine basis points to 4.24%. A dollar gauge slid 0.6%.
Clark Geranen at CalBay Investments says it’s extremely difficult for investors to make investing decisions off of tariff news, and they should avoid making any drastic portfolio moves at this stage.
“While Tuesday’s tariffs are a go, it remains very unclear on just how long these tariffs will remain,” he said. “We tend to believe these are more of a negotiation tactic and not the start of a long and drawn out reciprocal trade war. Still, in these situations, investors sell first and ask questions later.”
At Miller Tabak, Matt Maley notes that the market — and several of its key stocks — are becoming “quite oversold.”
“So, even though we are still looking for a deep correction at some point this year, it won’t come in a straight line,” Maley said. “We have been saying for a while now that investors should ‘sell the rallies’ — and we still feel this way. But we just might get a bounce sooner than many people are thinking.”
“On a short-term basis, while we wait for the markets to bottom, the next leg lower could prove sinister,” said Dan Wantrobski at Janney Montgomery Scott. “So folks should remain on guard for some big moves in our opinion.”
He noted that while the “buy side” has done a good deal of paring down their technology exposures, they remain overweight US equities in general – which comes alongside some of the heaviest positioning seen on the retail side in years.
“This again presents a good deal of potential firepower in the event that selling pressure gains more momentum from here,” Wantrobski added. “We have not seen any signs of panic yet, and selling has been rather orderly.”
With S&P 500 within a striking distance of its 200-day moving average, Jonathan Krinsky at BTIG says he’s beeen receiving an increasing amount of questions as to whether we are near a bottom.
“The question we have isn’t whether or not we bounce at the 200-DMA, it’s what happens after the bounce?” Krinsky said. “Investors have become accustomed to ‘V-shaped’ recoveries. While we aren’t opposed to that outcome, we do want to at least be open to the possibility that we see more of a ‘W-shaped’ bottom with a bounce and re-test later this month.”
Trend following Commodity Trading Advisors are partly responsible for US stocks declining last week. There’s more bad news after the S&P 500 began March deep in the red: CTAs are under pressure to keep selling no matter which way the market goes over the next week.
Goldman Sachs Group Inc. estimates the cohort already sold about $23 billion of global stocks last week. However, they still have about $137 billion in long positions. “We have this cohort modeled as sellers of SPX in every scenario over the next week,” Cullen Morgan, equity derivatives and flows specialist, wrote in a note.
A Goldman Sachs measure of risk appetite has turned negative for the first time since October amid concerns around a slowing economy. Those worries have hit the US harder than the rest of the world, strategist Andrea Ferrario says, suggesting international markets could extend their outperformance.
Sentiment around S&P 500 earnings is now “very negative” even as companies enjoyed a strong fourth-quarter reporting season, the strategist writes in a note. Meanwhile, the outlook for profits in other developed markets remains positive.
Corporate Highlights:
- CrowdStrike Holding Inc., a cybersecurity company, issued a worse-than-expected earnings outlook, signaling that it may still be struggling to recover from a flawed software update that crashed millions of computers globally last year.
- Google is urging officials at President Donald Trump’s Justice Department to back away from a push to break up the search engine company, citing national security concerns, according to people familiar with the discussions.
- Apple Inc. rolled out a new iPad Air along with a redesigned keyboard accessory and an upgraded low-end tablet, enhancing devices that helped lift holiday sales despite an iPhone slump.
- Mars Inc. is talking to investors on Tuesday about selling around $26 billion of bonds to help finance its purchase of Kellanova, according to people with knowledge of the matter, in what would be the biggest US corporate bond sale of the year.
- Bankers are working on funding packages of around $12 billion for Walgreens Boots Alliance Inc. to back a potential take-private deal by Sycamore Partners, in what would be one of the largest leverage buyout debt deals since the great financial crisis.
- UnitedHealth Group Inc. moved closer to winning dismissal of a long-running lawsuit in which the US government claims the company overbilled Medicare by at least $2.1 billion.
- Target Corp. is projecting little to no sales growth this year, a concerning sign for a big-box retailer that’s struggling to shake off a lengthy slump.
- Best Buy Co. said shoppers will remain constrained by inflation this year as it forecast that annual sales could be little changed.
- A BlackRock Inc.-led consortium agreed to buy control of key ports near the Panama Canal from Hong Kong-based conglomerate CK Hutchison Holdings Ltd. after pressure from US President Donald Trump to limit Chinese interests in the region.
- Aramco plans to trim the world’s biggest dividend, lowering a key source of funds for Saudi Arabia’s budget while relieving stress on its own finances.
Key events this week:
- China Caixin services PMI, Wednesday
- Eurozone HCOB services PMI, PPI, Wednesday
- US ADP employment, ISM services index, factory orders, Wednesday
- Fed’s Beige Book, Wednesday
- Eurozone retail sales, ECB rate decision, Thursday
- US trade, initial jobless claims, wholesale inventories, Thursday
- US Treasury Secretary Scott Bessent speaks, Thursday
- Fed’s Christopher Waller and Raphael Bostic speak, Thursday
- Eurozone GDP, Friday
- US jobs report, Friday
- Fed Chair Jerome Powell gives keynote speech at an event in New York hosted by University of Chicago Booth School of Business, Friday
- Fed’s John Williams, Michelle Bowman and Adriana Kugler speak, Friday
Some of the main moves in markets:
Stocks
- The S&P 500 fell 1.2% as of 4 p.m. New York time
- The Nasdaq 100 fell 0.4%
- The Dow Jones Industrial Average fell 1.6%
- The MSCI World Index fell 1.1%
- Bloomberg Magnificent 7 Total Return Index fell 0.7%
- The Russell 2000 Index fell 1.1%
Currencies
- The Bloomberg Dollar Spot Index fell 0.6%
- The euro rose 1.2% to $1.0611
- The British pound rose 0.7% to $1.2786
- The Japanese yen rose 0.3% to 149.06 per dollar
Cryptocurrencies
- Bitcoin rose 1.8% to $86,867.92
- Ether rose 1% to $2,132.09
Bonds
- The yield on 10-year Treasuries rose nine basis points to 4.24%
- Germany’s 10-year yield was little changed at 2.49%
- Britain’s 10-year yield declined two basis points to 4.53%
Commodities
- West Texas Intermediate crude was little changed
- Spot gold rose 0.9% to $2,918.40 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Lu Wang, Isabelle Lee, Margaryta Kirakosian, Julien Ponthus, Sujata Rao, Aya Wagatsuma, Martin Keohan and Phil Kuntz.
©2025 Bloomberg L.P.
