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Traders work on the floor of the New York Stock Exchange in the Financial District in New York City on March 4, 2025.
Timothy A. Clary | Afp | Getty Images
U.S. stock futures rose Tuesday night after all three major averages suffered sharp losses for a second session.
Futures tied to the Dow Jones Industrial Average rose 245 points, or 0.6%. S&P 500 futures and Nasdaq 100 futures added 0.7% and 0.8%, respectively.
The blue-chip Dow tumbled 670.25 points, or 1.55%, to end Tuesday's regular trading session. The S&P 500 dropped 1.22%, and the Nasdaq Composite shed 0.35%. The tech-heavy Nasdaq had dipped more than 2% at its lowest point and came within striking distance of correction territory, a term that refers to an index falling 10% from a recent peak.
U.S. stocks slid for their second day in a row after President Donald Trump's new 25% tariffs on Canada and Mexico officially took effect on Tuesday. In response, Canada, Mexico and China — with China hit by an additional 10% duty — have prepared retaliatory measures.
However, Commerce Secretary Howard Lutnick said on "Fox Business" on Tuesday afternoon that the U.S. might meet Canada and Mexico somewhere "in the middle" to "work something out" on tariffs.
"The thing that we have emphasized over and over again is that Trump introduces uncertainty. We now are at a point where a single tweet or a single release of information can significantly change the interpretation of what markets look like," said Michael Green, chief strategist at Simplify Asset Management.
Green added that a mounting trade war, exacerbated by retaliatory tariffs, could place a damper on the economy going forward, although it is still uncertain what the long-term prospects will look like.
"You almost end up in a forced savings regime, which in turn negatively affects employment, negatively affects wealth, and that's what markets are trying to price right now. We genuinely don't actually know," he told CNBC.
New economic releases on Wednesday morning that could shed light on the state of the U.S. economy include the ADP private payrolls report for February, as well as the purchasing managers' index for last month.
Companies due to report quarterly earnings on Wednesday include Thor Industries, Abercrombie & Fitch, Campbell's and Brown-Forman.
VIX above 20 for 7 days in a row
The Cboe Volatility Index, known as the VIX, has jumped above the 20 threshold during each of the last seven sessions as Trump's trade war ramped up.
It's the longest steak the index has traded above the 20 level on an intraday basis since mid-October. The VIX looks at prices of options on the S&P 500 to track the level of fear on Wall Street.
The Cboe Volatility Index
— Yun Li
Trump could change his mind, but downside risks to U.S. markets have risen, Capital Economics says
The "flight to safety across financial markets" in reaction to the U.S. tariffs and weak economic data could turn out to be an overreaction if President Trump changes his mind, "but the downside risks to our upbeat forecasts for U.S. financial markets have increased," according to Capital Economics in London. "[T]he 'Trump trade' and the wider optimism around the U.S. economy and financial markets has faded in short order.
The latest round of tariffs take the effective U.S. tariff rate up to about 12%, the highest since the late 1940s, and the next scheduled round mean the effective rate "may well rise much further," wrote Jonas Goltermann, deputy chief markets economist.
Downbeat economic numbers, "a broader reassessment of the near-term economic outlook in the U.S.," policy uncertainty together with weaker confidence among businesses, consumers and investors all combine to create "headwinds for equity markets," Goltermann said.
— Scott Schnipper
Stocks making the biggest moves after the bell: AeroVironment, CrowdStrike and more
These are the stocks moving the most in after-hours trading:
- AeroVironment — The manufacturer of unmanned aircraft tanked 16%. AeroVironment issued weak guidance for its full-year results, calling for adjusted earnings of $2.92 to $3.13 per share on revenue of $780 million to $795 million.
- CrowdStrike — The cybersecurity stock tumbled 9%. The company sees its full-year revenue coming in between $4.74 billion and $4.81 billion, which encompasses the $4.77 billion consensus prediction, per FactSet.
- Ross Stores — The off-price retailer inched higher by less than 1%. Fourth-quarter earnings surpassed estimates, coming in at $1.79 per share, versus analysts' call for $1.66 per share, per LSEG.
Read the full list of stocks moving here.
— Lisa Kailai Han
English (US)