Wall Street opened on a cautious note Tuesday, extending its losing streak after Monday’s brutal market collapse. The Dow Jones Industrial Average fell 73.8 points, or 0.18%, to 41,837.95. The S&P 500 dropped 10.9 points, or 0.19%, to 5,603.65, while the Nasdaq Composite showed a slight recovery in early trading — a rare glimmer of hope in an otherwise nervous market atmosphere.
Investor sentiment remains fragile, weighed down by fears of an economic slowdown. Although President Donald Trump attempted to soften his recent "recession" remarks, uncertainty continues to dominate the market. Traders are anxiously awaiting February’s Consumer Price Index (CPI) data, hoping for signs of easing inflation that could restore some stability.
Analysts point to Trump’s unpredictable tariff policies as a major source of market instability. His latest decision to double tariffs on steel and aluminum from Canada — a move he called necessary to counter Canadian provincial policies — has stoked fears of a prolonged trade war. Some economists warn that if tensions escalate further, the US could face stagflation — an economic nightmare marked by stagnant growth and high inflation, last seen during the 1970s oil crisis.
The effects of this uncertainty were brutally evident on Monday when a historic sell-off wiped out a staggering $4 trillion from the S&P 500’s market value — an amount equivalent to the entire market capitalization of all companies listed on India’s Bombay Stock Exchange (BSE). The sheer scale of the loss underscores the level of investor anxiety, amplified by Trump’s refusal to predict whether the US economy might tip into recession.
Industries across the board are feeling the impact. Delta Air Lines slashed its revenue forecast for the first quarter of 2025, citing weakened demand for bookings and falling consumer confidence. Southwest Airlines followed suit, blaming a combination of reduced government travel, California wildfires, and a “softness in demand trends” for its lower projections. Meanwhile, tech giant Oracle reported disappointing earnings, falling short of analysts' expectations and dragging its stock down by 3.7%.
Big Tech stocks — which once propelled the market to record highs — offered a rare moment of resilience. Tesla rebounded 2.1% after Trump publicly praised Elon Musk and announced plans to buy a Tesla vehicle in support of what he called "Elon’s baby." Other tech giants like Nvidia, Apple, and Microsoft managed to stabilize after weeks of steep losses, though analysts at Citi warned that the AI-driven tech rally that powered markets last year may be losing steam.
Global markets are feeling the heat too. European indices slid as investors braced for ripple effects from the US slowdown. In Asia, Chinese stocks managed modest gains, with Shanghai rising 0.4%, supported by government measures aimed at reviving the slowing economy. Hong Kong’s Hang Seng index remained flat.
In the bond market, Treasury yields showed signs of stabilization after months of volatility. The yield on the 10-year Treasury rose slightly to 4.24%, up from 4.22% late Monday. Still, this remains well below January’s peak of 4.8%, reflecting continued demand for safe-haven assets.
A fresh US jobs report offered a glimmer of hope, showing that employers posted 7.7 million job openings at the end of January — in line with economists' expectations. For now, the job market remains relatively strong, helping prevent a full-scale economic meltdown. However, analysts warn that prolonged uncertainty could push companies to freeze hiring and investments, creating a self-fulfilling cycle of slowing growth.
The road ahead remains murky. Earnings season is ramping up, and companies across industries will offer fresh insights into how they’re navigating the choppy waters of tariffs, inflation, and volatile demand. With Trump continuing to double down on his aggressive economic policies, investors are bracing for more turbulence — and perhaps even greater losses — in the weeks to come.
