US stocks steadied early Tuesday after Monday’s bruising selloff, but the calm felt more like a pause than a clear rebound.
Major indexes inched higher in morning trading as investors tried to digest a volatile mix of tariff uncertainty and renewed questions about the next phase of the AI boom.
The S&P 500 edged up 0.1%, the Nasdaq Composite climbed 0.3%, and the Dow Jones Industrial Average advanced 339 points, a gain of 0.7%.
Monday’s slide was stark: the Dow fell 821.91 points, the S&P 500 dropped 1% to 6,837.75, and the Nasdaq lost 1.1%.
Three pressures are weighing on Wall Street
First, tariffs snapped back into the driver’s seat overnight.
A broad new US tariff on most global imports took effect just after midnight Tuesday at 10%, a lower rate than the 15% that President Donald Trump had threatened over the weekend.
The development added to the sense of policy whiplash for companies trying to plan costs and sourcing.
The US Customs and Border Protection issued a notice saying the extra 10% duty would apply starting 12:01 a.m. Tuesday, with exemptions for certain categories, including goods covered under the US-Mexico-Canada Agreement.
That “universal” tariff may not be the last shoe to drop.
As per official sources, the White House was considering additional “national security” tariffs that could cover areas including large batteries and telecommunications equipment.
For markets, the challenge is not just the level of tariffs but the moving target, what the final list looks like, which sectors are carved out, and how quickly trading partners respond.
Second, investors are still grappling with a new flavor of AI anxiety.
Monday’s selloff was fueled in part by fears that rapid advances in AI could upend chunks of the software ecosystem faster than many business models can adapt.
Third, volatility remains elevated, and traders are paying for protection.
Also Read: Citrini research: S&P 500 to drop 38% from 2026 highs by June 2028, here’s why
The one number traders watched
The main scheduled datapoint on Tuesday was US consumer confidence, with markets looking for signs that households are holding up as tariffs add price pressure and headlines stay noisy.
A widely circulated forecast ahead of the release pegged the Conference Board’s Consumer Confidence Index at 91.8 for February, up from 86.8 previously.
The other looming catalyst was earnings, with Nvidia’s report due Wednesday and widely viewed as a key test for the AI trade’s “expectations are everything” dynamic.
Even with Tuesday’s steadier tone, the broader setup remains fragile.
The S&P 500’s recent slide left it roughly 14% higher than a year ago, but down over the past month, an awkward mix of still-strong longer-term gains and a short-term tape that feels jumpy.
For now, investors are treading carefully as they wait for clarity on tariffs and whether AI leaders can deliver.
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