On Tuesday, April 8th, the U.S. stock market closed with a comprehensive decline, as the S&P 500 index fell below the 5,000 point mark, hitting a new low in nearly a year. Despite an early morning surge of over 4%, as midnight approached and the Trump administration was set to implement tariffs as high as 104% on China, hopes of tariff concessions dwindled, triggering intense selling.
The market remains highly uncertain about how President Trump will handle the trade war. The new round of “tit-for-tat tariffs” measures, including imposing tariffs as high as 104% on imported goods from China, is set to take effect after midnight.
Since last Wednesday evening, when President Trump announced his global tariff plan, the market value of the S&P 500 index has evaporated by $5.83 trillion in just four trading days, marking the largest four-day value loss since the index was established in the 1950s. The cumulative drop exceeds 12%, representing the most severe consecutive four-day decline since the COVID-19 pandemic.
In early trading on Tuesday, the market briefly surged on expectations that Trump might soften his stance or delay the deadline for the tariff implementation on Wednesday, causing the S&P 500 to rise by over 4%.
However, White House spokesperson Karoline Leavitt stated on Tuesday afternoon that although nearly 70 countries have contacted the U.S. hoping to engage in negotiations to mitigate the impact of U.S. trade policies, Trump still expects the tariffs to be implemented as scheduled.
Lindsey Bell, Chief Market Strategist at New York’s Clearnomics, said, “This morning, the market optimistically believed that we would see some signs of progress towards agreements or compromises with some major countries or at least a delay in the effective date, given that so many countries want to negotiate.”
“But as the midnight deadline approaches, it seems unlikely that this scenario will unfold, and investors’ confidence is waning,” she said.
The White House also confirmed on Tuesday afternoon that the 104% tariffs on China are expected to take effect on Wednesday.
Additionally, U.S. Trade Representative Jamieson Greer stated on Tuesday that exemptions for global tariffs are unlikely in the short term.
Melissa Brown, Managing Director of Investment Decision Research at SimCorp, said, “Earnings reports for the quarter will soon be released. Even if the first-quarter performance is not too weak, we will see many companies make assessments based on the expected impact of tariffs.”
This week, large banks such as JPMorgan Chase, Morgan Stanley, and Wells Fargo will release their earnings reports on Friday, marking the start of the earnings season.
The S&P 500 index fell 79.48 points, a decrease of 1.6%, to close at 4,982.77.
The Dow Jones Industrial Average dropped 320.01 points, a decrease of 0.8%, to close at 37,645.59.
The Nasdaq Composite Index declined by 335.35 points, a decrease of 2.1%, closing at 15,267.91.
The Russell 2000 index, representing small-cap stocks, fell by 49.43 points, a decrease of 2.7%, to close at 1,760.71 points.
Specifically, the S&P 500 index on Tuesday’s close was just a step away from entering a bear market, having fallen nearly 19% from its historical high on February 19. A bear market is technically defined as a 20% decline.
The market fear gauge, the Chicago Board Options Exchange Volatility Index (VIX), briefly dropped to 36.48 points on Tuesday, before closing at 52.33 points, marking the highest closing since March 2020 and a fourth consecutive day of increase. In the coming days, the market may continue to experience significant volatility due to positive or negative news, prompting investors to carefully assess risks.