NEW YORK — Global financial markets experienced a slight upswing on Tuesday, partially recovering from the significant losses triggered last week by President Donald Trump’s aggressive tariff policies.
As of morning trading, the S&P 500 had increased by 3.7%, although it still lags behind its February record by over 14%. The Dow Jones Industrial Average climbed 1,363 points, or 3.6%, by 10:12 a.m. Eastern time, while the Nasdaq composite saw a 4.2% increase.
This recovery was observed internationally, with stock indexes in Tokyo rising by 6%, Paris by 3.4%, and Shanghai by 1.6%. Crude oil prices also edged upward after hitting their lowest point since 2021 on Monday.
Bitcoin stabilized, climbing back above $79,000 after dipping toward $76,000 the previous day. Analysts attribute the rebound to general market volatility, predicting continued fluctuations in the near term.
The primary concern revolves around the duration of Trump’s tariffs, which could lead to higher consumer prices and economic deceleration. Prolonged tariffs could trigger a recession, while a swift resolution through negotiation could mitigate the damage.
Optimism persists on Wall Street regarding potential negotiations, with Trump stating on Monday that he had discussed “the confines and probability of a great DEAL for both countries” with South Korea’s acting president.
Trump announced on social media that South Korea’s “top TEAM is on a plane heading to the U.S., and things are looking good,” and added that the U.S. is in discussions with many other countries seeking agreements.
Japanese stocks spearheaded the global market gains following Prime Minister Shigeru Ishiba’s appointment of a trade negotiator for U.S. talks, based on an agreement between Ishiba and Trump, according to Japanese officials.
Conversely, China has adopted a more confrontational stance, vowing to “fight to the end” and threatening countermeasures in response to Trump’s potential increase in tariffs on the country.
The market’s rebound on Tuesday is not entirely unexpected, as markets rarely move in a single direction. Historically, some of the market’s best days have occurred near its worst.
For instance, the S&P 500’s largest gain since World War II was an 11.6% surge on Oct. 13, 2008, during the Great Recession. At that time, there were fears of a financial system collapse and the S&P 500 was amidst a nearly 57% decline from its late 2007 peak until March 2009. A few weeks later, the index again rose sharply by 10.8%.
This volatility underscores the advice of many financial advisors to avoid market timing, selling long-term investments due to short-term anxieties, which risks missing out on significant upswings.
Increasingly, Republican figures are voicing concern over the White House’s tariff implementation, potentially influencing Trump’s strategy. Senator John Kennedy of Louisiana, while supporting Trump’s trade goals, expressed worry about the resulting economic instability.
Kennedy stated, “We don’t know if the medicine will be worse than the disease,” and emphasized that “This is President Trump’s economy now.”
These comments follow inconsistent statements from Trump on Monday. He indicated openness to negotiations “if we can make a really fair deal and a good deal for the United States,” while also suggesting the possibility of both negotiated settlements and permanent tariffs.
Trump’s trade policy challenges the globalization trend, which has lowered prices but also moved manufacturing jobs abroad. He aims to revitalize domestic manufacturing, a long-term project, and reduce trade deficits.
Health insurers were among the market’s top performers after the Centers for Medicare & Medicaid Services announced a larger-than-anticipated increase in Medicare Advantage payments for the coming year. Humana shares rose 12.5%, UnitedHealth climbed 7.8%, and Elevance increased 5.2%.
Levi Strauss shares grew by 2.8% after reporting better-than-expected quarterly profits and issuing a positive 2025 forecast, despite the ongoing trade tensions.
Treasury yields continued to recover for a second consecutive day. The 10-year Treasury yield increased to 4.24% from 4.15% late Monday, and from 4.01% late Friday.
Yields tend to increase alongside expectations for U.S. economic strength and inflation. ___ AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
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