The New York stock market failed to rebound on Tuesday.
After an initial surge, the market took a sharp downturn following the White House’s announcement of an additional 104% tariff on Chinese imports starting Wednesday.
Tesla and Nvidia, which had earlier surged over 7% and 8% respectively, reversed course and fell 5% and 1.4%.
Apple also experienced a dramatic shift, closing down 5% after an initial 5% gain.
Surge then a Sharp Reverse
Following steep declines on April 3 and 4, and a breather on Monday, the New York stock market opened with a strong rally.
The Dow Jones Industrial Average surged 3.9% in early trading, while the S&P 500 and Nasdaq jumped 4.1% and 4.6% respectively.
However, news that the U.S. would impose an additional 50% tariff on Chinese products, bringing the total to 104%, triggered a sell-off among investors.
The White House stated that the 12-hour deadline set by U.S. President Donald Trump had passed and that the total additional tariff on Chinese imports would reach 104%, including the 20% tariff imposed shortly after his inauguration, the recently announced 34% reciprocal tariff, and the new 50% tariff.
As hopes for easing trade tensions through negotiations faded, the market shifted to a downward trend.
The Dow closed down 320.01 points (0.84%) at 37,645.59, the S&P 500 dropped 79.48 points (1.57%) to 4,982.77, falling below the 5,000 mark, and the Nasdaq plummeted 335.35 points (2.15%) to 15,267.91.
The CBOE Volatility Index (VIX), often called the Wall Street fear index, surpassed 50, soaring 5.35 points (11.39%) to 52.33.
From Surge to Sudden Crash
The Magnificent Seven big tech stocks experienced a dramatic reversal from early gains to significant losses.
Nvidia initially surged 8.4% to $105.85, reclaiming the $100 mark, but then reversed course due to the shock from the Chinese tariffs.
Nvidia ultimately closed down $1.34 (1.37%) at $96.30.
Tesla initially climbed 7.4% to $250.44 but then plummeted following the tariff announcement and Trump’s declaration to revive the coal industry. Concerns about Chinese retaliation and potential impacts on Tesla’s battery industry compounded the sell-off.
Tesla ended the day down $11.43 (4.90%) at $221.86, erasing its early gains.
Alphabet fell $2.66 (1.78%) to $146.58, while Amazon dropped $4.60 (2.62%) to $170.66.
Meta Platforms closed down $5.80 (1.12%) at $510.45.
Apple Loses Top Market Cap to Microsoft After Four Days of Declines
Apple also experienced significant volatility on this day.
After an initial surge of 4.9% to $190.34, it relinquished all gains and closed down 4.9%.
Apple fell $9.04 (4.98%) to $172.42.
Microsoft also declined, but its drop was much less severe.
Microsoft closed down $3.30 (0.92%) at $354.56.
Since April 3, Apple’s stock has plummeted 23% over four trading days, allowing Microsoft to reclaim the top market cap position.
Based on closing prices, Microsoft’s market cap stood at $2.64 trillion, while Apple’s fell to $2.59 trillion.
Apple is particularly vulnerable to tariff impacts due to its production of iPhones, iPods, and Apple Watches in China, Vietnam, and India, which are subject to high tariffs when imported into the United States.
The tariff rate on Apple’s main production base in China will increase by an additional 104% starting Wednesday.
