Dow Set to Open Down as Market Weighs Economic Data, Tariff News
Stocks were falling on Tuesday as Wall Street saw the latest pop as a chance to sell riskier stocks.
The Dow Jones Industrial Average was down 315 points, or 0.8%. The S&P 500 was down 1.3%. The Nasdaq Composite fell 2%.
Markets seemed to rally on Monday in the absence of major tariff threats from the White House. Sevens Report Research’s Tom Essaye told Barron’s that could signal someone in the Trump administration is trying to dial back some of the chaotic announcements that have roiled markets.
Essaye says the latest updates on import prices and capacity utilization were a touch inflationary. Those numbers followed soft updates on retail sales and New York state manufacturing activity on Monday. That said, Wall Street was also likely using the two-day rally as a chance to de-risk, according to Essaye.
The Invesco S&P 500 High Beta ETF, which includes the S&P 500’s riskier stocks, was down 2%. The Invesco S&P 500 Low Volatility ETF was flat. The S&P’s worst performers included Tesla, First Solar, and Super Micro Computer.
“Until the root problem of this pullback is addressed, which is policy uncertainty, then every decent rally is just an opportunity to adjust your risk,” Essaye says.
He argues the recent volatility in markets is a good reminder of how the first Trump administration operated.
“A lot of people forgot about how chaotic and how disjointed things were,” Essaye says. “In the end, it all worked out, but it’s a bumpy ride along the way. And I think the best thing the administration could do to help the market right now is to just shut up. Just don’t say anything until you have something constructive to say.”