U.S. Stocks Pull Back Well Off Highs After Early Rally

After moving sharply higher early in the session, stocks have given back ground over the course of the trading day on Tuesday. The major averages have pulled back well off their highs of the session, with the Nasdaq and the S&P 500 briefly dipping into negative territory.

Currently, the major averages are in positive territory but well off their best levels. The Dow is up 283.64 points or 0.8 percent at 38,249.24, the S&P 500 is up 22.26 points or 0.4 percent at 5,084.51 and the Nasdaq is up 58.24 points or 0.4 percent at 15,661.50.

Earlier in the day, the Dow had jumped by nearly 3.9 percent, while the S&P 500 and Nasdaq had both surged more than 4 percent.

The early rally on Wall Street partly reflected optimism about negotiations on President Donald Trump’s new tariffs that could help avoid a global trade war.

Treasury Secretary Scott Bessent said approximately 70 countries have approached the White House about trade talks, with Japan purportedly getting priority status.

“I think you are going to see some very large countries with large trade deficits come forward very quickly,” Bessent said during an interview on CNBC. “If they come to the table with solid proposals, I think we can end up with some good deals.”

Trump also said in a post on Truth Social that he had a “great call” with South Korea’s acting President Han Duck-soo and said the country’s “top TEAM is on a plane heading to the U.S., and things are looking good.”

Traders also looked to pick up stocks at reduced levels following the recent nosedive, which saw the major averages hit their lowest intraday levels in over a year on Monday before regaining ground.

Buying has waned over the course of the session, however, as tensions over tariffs continue to rise between the U.S. and China.

China has vowed to “fight to the end” after Trump threatened to impose an additional 50 percent tariff on Chinese goods unless the country withdraws its new 34 percent tariff on U.S. goods.

A White House official told CNBC the effective tariff rate on China will spike to 104 percent at midnight, when Trump’s other “reciprocal tariffs” are also set to take effect.

Sector News

Oil service stocks have come under considerable selling pressure over the course of the session, dragging the Philadelphia Oil Service Index down by 2.7 percent.

The sell-off by oil service stocks comes as the price of crude oil has turned lower after rebounding earlier in the day.

Substantial weakness has also emerged among biotechnology stocks, as reflected by the 2.3 percent slump by the NYSE Arca Biotechnology Index.

Airline, steel and oil producer stocks have also shown notable moves to the downside, while strength remains visible among gold and banking stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved sharply higher during trading on Tuesday. Japan’s Nikkei 225 Index spiked by 6.0 percent, while China’s Shanghai Composite Index jumped by 1.6 percent.

The major European markets have also shown strong moves to the upside. While the U.K.’s FTSE 100 Index shot up by 2.7 percent, the German DAX Index and the French CAC 40 Index both surged by 2.5 percent.

In the bond market, treasuries are extending the sharp pullback seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 7.8 basis points at 4.235 percent.

Business News