4:20pm: Dow gains, tech stocks retreat
Stocks closed mixed on Tuesday, with the Dow extending its recent rally while the S&P 500 and Nasdaq fell.
The Dow rose 160 points, or 0.4%, to 43,621. The gains in the blue-chip index stood in contrast to declines in broader equity markets, as investors rotated into value stocks.
The S&P 500 fell 28 points, or 0.5%, to 5,955, weighed down by weakness in technology and consumer discretionary sectors. The Nasdaq dropped 261 points, or 1.4%, to 19,026, marking its steepest decline in recent sessions as technology stocks came under pressure.
The divergence reflects investors' preference for traditional value stocks over high-growth technology shares, which have experienced heightened volatility. The shift comes amid a reassessment of market positioning following recent economic data and corporate earnings reports.
The CBOE Volatility Index (VIX), a measure of market uncertainty, ticked higher, signaling increased caution among investors. Declining stocks outpaced advancing ones on both the NYSE and Nasdaq, while trading volume remained elevated.
2:35pm: Consumer confidence declines
Consumer confidence fell more than expected in February, with The Conference Board’s index dropping to 98.3 from 105.2. While current conditions remained relatively stable, expectations declined sharply to their lowest level since June 2024.
The decline in sentiment is politically divided, with University of Michigan data showing a sharp drop among left-leaning respondents, while conservative-leaning sentiment has remained stronger. However, even some traditionally right-leaning surveys have weakened.
Concerns over tariffs, government spending cuts, and immigration crackdowns are weighing on consumers, leading to caution in discretionary spending. Inflation expectations also rose to 6.0%, the highest since April 2023, adding to economic uncertainty.
"Americans are still starkly split about whether the economic outlook is improving or worsening, but the split has flipped since the election," Comerica's Bill Adams remarked Tuesday.
"The DOGE suspensions of government payments and layoff plans landed a big hit on the confidence of left-leaning consumers. Americans who work in the public sector, higher education, research, or the not-for-profit world are worried about their job security and are likely to be more cautious toward discretionary spending near-term."
12:35pm: Ongoing concerns
The Dow is holding onto modest gains, up 0.1% in midday trading, while the broader market indexes are in negative territory.
The S&P 500 has slipped 0.6%, and the tech-heavy Nasdaq is down 1.2%.
Stocks are struggling to maintain momentum after a volatile start to the week. The market's recent pullback comes amid ongoing concerns about the economic outlook and uncertainty surrounding potential policy impacts from Washington.
Major technology stocks, which led declines earlier this week, are showing mixed performance today. Nvidia is up slightly ahead of its earnings report tomorrow, while other tech giants like Microsoft, Alphabet, and Tesla are trading lower.
11:42am: Broad selloff
Markets are on the verge of a broad selloff due to escalating geopolitical tensions, says Chris Beauchamp, Chief Market Analyst at IG.
“The drop in bitcoin appears to be prompting the beginnings of a broader selloff in other assets, as oil prices fall 2% and Wall Street gives up its fleeting opening gains," Beauchamp commented Tuesday.
"More tariff talk and signs of further rupture between the US and Canada piles fresh worries on investors, and as the Vix hits a fresh one month high it seems we might be on the cusp of a full-blown bout of market volatility.”
10:55am: Rough start for the dollar
The US dollar has had a rough start to the year, and its struggles are expected to continue, according to Nigel Green, CEO of deVere Group.
Green attributes the dollar’s weakness to factors such as Trump’s trade policy, strong global growth, and political changes in Europe, which are likely to persist.
“For investors, this presents both risks and opportunities," Green wrote.
While some tariffs have been reintroduced, the broad measures investors expected have not materialized, leading to a loss of momentum for the dollar. Green notes that this environment presents both risks and opportunities for investors.
9.45am: Mixed start on Wall Street
Wall Street faced mixed fortunes as trading got underway on Tuesday, with the Nasdaq losing yet further ground after the bell.
The Nasdaq slipped an additional 0.4%, adding to Monday’s 1.2% decline, after fears around the impact of president Trump’s tariffs on the economy weighed.
The Dow Jones and S&P 500 fared better in the meantime though, adding 0.5% and 0.1% respectively as Tuesday’s session kicked off.
Home Depot Inc led the risers on the former, gaining 2.7% on expectation-beating figures, including positive comparable sales in its latest quarter, after eight consecutive declines.
Risers elsewhere included Solventum Corp, which jumped 8.5% on news Thermo Fisher Scientific would buy its purification and filtration arm for around $4.1 billion.
Keurig Dr Pepper Inc added 3.6% in the meantime, as fourth-quarter results also beat expectations.
Figures also showed house prices across the US rose 3.9% in the year to December, against November’s 3.7% increase, according to the S&P CoreLogic Case-Shiller U.S. National Home Price index.
7.00am: Futher declines seen
Fears around looming tariffs appeared to remain front and centre of investors’ minds ahead of Tuesday’s opening bell on Wall Street.
Futures showed the Nasdaq off 0.5% ahead of trading, while the S&P 500 and Dow Jones were seen 0.3% and 0.2% lower respectively.
Both the Nasdaq and S&P 500 had faced pressure on Monday, with the former shedding 1.2% as president Trump signalled delayed levies against Canadian and Mexican goods would go ahead next week and flagged plans to curb Chinese investment in the US.
Scope Markets’ Joshua Mahony noted the “US stagflation story,” prompted by Friday’s weak purchasing managers index data, had “sparked widespread risk-off sentiment”.
Indeed, pressure on equities was mirrored by a slump for bitcoin on Tuesday to below the US$90,000 mark and to its lowest level in three months.
“Everywhere you look volatility and uncertainty are rising,” XTB analyst Kathleen Brooks added.