Stock market rises after days of losses spurred by tariff anxiety

The stock market staged a brief rally Tuesday on hopes that President Donald Trump would turn from raising tariffs to cutting deals, before sinking sharply amid renewed tough talk by administration officials. The S&P 500 index closed down 1.5%, bringing its total loss since mid-February to almost 20% – nearing a bear market.

The S&P 500 jumped nearly 4% in the first hour of trading, after Treasury Secretary Scott Bessent told CNBC that nearly 70 countries had approached the United States about negotiating over trade barriers. The president fueled the upbeat mood with a subsequent social media post, describing a “great call” with South Korea’s acting president about a potential bargain.

But the market rebound soon fizzled.

On Capitol Hill, Jamieson Greer, the president’s chief trade negotiator, described the nation’s $1.2 trillion trade deficit as an emergency that required “urgent” efforts to reshape the U.S. economy. Greer brushed aside complaints about potential costs to consumers and businesses, telling the Senate Finance Committee: “The president is fixed in his purpose.”

One week after the president’s announcement of the highest import taxes in more than a century, investors, companies and lawmakers continue trying to make sense of Trump’s ultimate goal. For now, the administration says the president is moving forward on twin tracks: raising tariffs to encourage manufacturers to return to the United States while fielding offers by other nations to lower their barriers to U.S. products.

Despite swelling criticism from lawmakers and chief executives, the administration is cheered by the eagerness of foreign leaders hoping to avert U.S. tariffs by making a deal with Trump. In her daily briefing for reporters, White House press secretary Karoline Leavitt struck a combative tone: “America does not need other countries as much as other countries need us.”

The president’s high-risk strategy already is paying off, according to Greer, who cited recent investment announcements by automakers and other manufacturers planning to expand their U.S. operations. Likewise, officials from Argentina, Vietnam, and Israel have indicated they will drop their tariff and regulatory barriers to U.S. exports.

Greer and other administration officials are engaged in talks with countries such as Japan and Korea.

But there is no immediate prospect of talks with the nation at the center of U.S. trade complaints: China. After China imposed a 34% tariff on U.S. goods, in retaliation for Trump’s April 2 announcement, the president added an additional 50% tax on top of his earlier moves.

As of 12:01 a.m. Wednesday, American importers of some Chinese products will pay a tax of up to 129%.

Some big-name tech stocks with notable morning gains joined the broader market in retreating, with Alphabet, Amazon, Apple and Tesla in negative territory Tuesday afternoon.

Stock analysts had characterized Tuesday morning’s rally as a natural reaction after weeks of declines, capped by the harshest three-day sell-off in years. In a sign that trading had settled down somewhat, the Cboe volatility index, known as Wall Street’s “fear gauge,” plunged 20% Tuesday.

With tariff negotiations beginning, markets “may be an important step closer to finding an equilibrium,” Mark Zabicki, chief investment officer at LPL Financial, wrote in a Tuesday research note.

The administration additional 50% tariffs on China, however, drew sharp criticism from Beijing as China’s Commerce Ministry said it will “fight to end.”

Some Asian and European markets recovered Tuesday despite the Chinese threats of trade war escalation.

Germany’s DAX gained about 2.5%, and London’s FTSE 100 climbed 3.3 percent. Japan’s Nikkei 225 jumped 6%, while Hong Kong’s Hang Seng Index and India’s Sensex were both up 1.5%.

But indexes linked to several Southeast Asian countries, seen as more sensitive to the global trade war, suffered more losses. Indexes linked to Vietnam and Indonesia lost more than 7%, while an index linked to Thailand was down more than 4%. Taiwan’s Taiex fell 4%.