Tuesday started ugly for Wall Street. Stocks opened deep in the red as investors braced for the fallout from Tariff Tuesday, but by midday, dip buyers stormed in, pushing markets higher. For a moment, it looked like they might pull off a full recovery.

The S&P 500 was just 30 minutes away from erasing a 2% loss—something it hasn’t done since the October 2022 bull market began—but the rally fizzled out just as fast as it started. When the dust settled, the S&P 500 ended down 1.2%, the Nasdaq slipped 0.4%, and the Russell 2000 lost 1.1%, with financials taking the biggest hit.

Momentum stocks and AI names tried to hold the line, with Nvidia (+1.67%) and Alphabet (+2.35%) leading the midday charge. But with tariffs now officially in effect and retaliation from China and Canada heating up, the market couldn’t hold the gains.

⚡ Closing Bell:

• Dow Jones: ⬇️ -1.6% › 42,521 › Financials dragged the index lower.

• S&P 500: ⬇️ -1.2% › 5,778.2 › Worst sector? Banks.

• Nasdaq 100: ⬇️ -0.4% › 18,285.2 › Tech held up, but volatility ruled.

• Russell 2000: ⬇️ -1.1% › 2,164.7 › Small caps struggled again.

Macro Moves:
➝ 10-Year Yield: ⬆️ +6.2 bps › 4.242%
➝ 2-Year Yield: Flat ➖ 3.98%

❗ Looking Ahead: After a wild two days of tariff fallout, market carnage, and last-minute rallies that went nowhere, it’s easy to forget—we’ve still got a Fed wildcard on Friday.

The jobs report is next up, and it’s a big one. If hiring slows down, Wall Street will start dreaming of rate cuts again. But if the labor market stays strong, the Fed might not flinch, keeping higher-for-longer firmly in play.

With markets already on edge, this report could be the next domino to fall—or the lifeline investors are hoping for.

#TRUTH:
❗❗❗ “The art of prophecy is very difficult, especially with respect to the future.”
~ Mark Twain

Wreckage Across the Board:

➝ Financials ⬇️ Worst drop since the Silicon Valley Bank collapse (2023).

➝ Airlines ⬇️ JetBlue (-5.73%), Delta (-6.45%), and United (-5.98%) nosedived on cost concerns.

➝ Cruise lines ⬇️ Carnival (-5.70%), Royal Caribbean (-5.87%), and Norwegian (-3.80%) couldn’t stay afloat.

➝ Automakers ⬇️ GM (-4.56%), Ford (-2.82%), and Stellantis (-4.38%) felt the tariff heat. Tesla (-4.45%) got caught in the wreckage.

Not Everyone Got Wrecked

➝ Yum! Brands ⬆️ (+0.98%) → Taco Bell’s 8% sales growth forecast kept it in the green.

➝ Crypto ⬆️ Bounced back → After an early plunge, digital assets ripped higher, proving once again they’re the ultimate risk-on rollercoaster.

Markets Look for a Lifeline:

After back-to-back selloffs, traders are wondering if relief is on the horizon. Commerce Secretary Howard Lutnick hinted that the administration might offer tariff relief for Canada and Mexico as soon as Wednesday, sparking a brief rally in late trading. But for now, there’s no official word from the top.

The big question: Will policymakers step in if market turbulence continues? Investors have long speculated about a Trump Put—the idea that sharp declines could prompt a shift in policy. While past market moves have influenced decision-making, this time around, the signals are less clear.

For now, the tariff standoff is heating up, with Canada, Mexico, and China all rolling out their own retaliatory measures. If markets were hoping for a quick resolution, they might have to wait a little longer.

Speed Bump:

Detroit’s biggest automakers are feeling the heat as new tariffs on Canadian and Mexican imports take effect. GM (-4.56%), Ford (-2.82%), and Stellantis (-4.38%) all slid Tuesday, with investors bracing for higher costs and potential price hikes across the industry.

With nearly $279 billion in imported vehicles last year and major manufacturers relying heavily on cross-border production, the impact could be significant. GM alone built nearly 900,000 vehicles in Mexico in 2024, and up to 25% of components in next year’s Tesla models will come from south of the border.

A study from the Anderson Economic Group warns that consumers could see sticker shock, with SUV prices rising as much as $9,000, pickups by $8,000, and even smaller cars climbing over $6,000. Automakers are already grappling with high interest rates and slowing demand—these new tariffs may only add to the pressure.

What’s next:
In his address to Congress Tuesday night, President Trump reaffirmed his commitment to restoring auto production, saying the tariffs are meant to strengthen U.S. manufacturing. He hinted at potential tax incentives for domestically made cars.

If these incentives are big enough, they could change how and where cars are built in the long run. But in the short term, automakers and consumers will have to navigate price adjustments.

In Numbers:

What It Would Cost Europe to Defend Itself Without the U.S.

🔹 €250B/year → Needed to bring EU defense budgets to 3.5% of GDP
🔹 €700M/day → The daily price tag for increased defense spending
🔹 €2,000 per citizen → Annual cost if spread across the EU population
🔹 100K troops → Germany’s necessary contribution, up from the 40K pledged
🔹 Hundreds of billions → Needed over years to build intelligence, command, and infrastructure capabilities

Funding options include repurposing the European Investment Bank, issuing defense bonds, or a joint borrowing program similar to the €750B pandemic recovery fund. While costly, some economists argue it could stimulate economic activity, especially in defense-related industries.

Escapes:

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Commodities Check : ✔️

• Oil: ⬇️ -0.5% › $68.05 per barrel

• Gold: ⬆️ +0.9% › $2,930 per troy ounce

• Silver: ⬆️ +0.6% › $31.88 per troy ounce

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The stinger

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