Market Volatility Lingers as Trump’s Tariff Plans Approach

NEW YORK, April 1, 2025 — U.S. stocks fluctuated on Tuesday amid persistent uncertainty surrounding President Donald Trump‘s impending tariff announcements. The market reacted to a volatile trading day as investors braced for potential tariffs that could significantly impact global trade.

The broad S&P 500 index added 0.38% to close at 5,633.07, while the Nasdaq Composite climbed 0.87% to finish at 17,449.89. The Dow Jones Industrial Average, however, slipped 11.80 points, or 0.03%, closing at 41,989.96. This whipsaw trading mirrored Monday’s patterns and reflected ongoing investor trepidation.

Tuesday’s rally followed disappointing economic data that raised concerns. The Institute for Supply Management manufacturing survey revealed that factory activity contracted for the first time since last April, reporting a figure below expectations. Furthermore, February job openings dipped slightly to 7.57 million, also below estimates.

With the White House poised to unveil reciprocal tariffs on goods from various countries, analysts and investors remain cautious. The anticipated announcement is expected to include tariffs upwards of 20% on select imports. Jay Woods, chief global strategist at Freedom Capital Markets, noted, “The lack of certainty and the shroud of secrecy has been driving the market insane. We have our correction, though, so perspective is key.”

Amid the uncertainty, leading sectors have faced pressure. Although the consumer discretionary sector saw a rare upward tick, it remains one of the worst performers in 2025. Major companies like Amazon and Tesla rallied, with shares of Amazon up about 3.6% while Tesla saw an increase of 2%.

On Monday, the S&P 500 index tumbled to a six-month low before recouping some of its losses, ultimately finishing down 4.6% for the first quarter. Analysts have noted that prolonged threat of tariffs has muddied the outlook for U.S. companies. “If tariffs turn out to be as aggressive as Trump threatens, we could see significant repercussions for the economy,” an analyst at Goldman Sachs warned.

Continued fears over inflation and potential recession have resulted in market volatility, forcing some analysts to revise their forecasts. Goldman Sachs reduced its year-end target for the S&P 500 to 5,700 while Barclays cut theirs to 5,900.

Global markets reflected a similar unease, with major indexes in Asia and Europe trading lower ahead of the tariff announcement. The uncertainty surrounding trade relations is palpable, as evidenced by rising fears among investors, leading to a 4% decline in the U.S. dollar index.

The tariff threats likely affect more than just U.S. stocks — they impact international relations as well. European leaders, including European Commission President Ursula von der Leyen, have signaled potential retaliatory measures. Canada has also indicated a readiness to implement retaliatory tariffs.

Looking ahead, analysts express caution. “We will know more on Wednesday, but immediate clarity may still elude us,” noted Christopher Harvey, head of equity strategy at Wells Fargo Securities. “Investors should be poised for ongoing volatility.”

As the market digests these developments, attention will remain focused on the forthcoming announcement and its implications. The past week’s economic indicators have already cast a shadow over growth prospects, potentially signaling a bumpy recovery in the months to come.