Market Rides the Tariff Rollercoaster — And the Scares Aren't Over

Panic over tariffs produced a big gap-down open on Monday morning, but by the closing bell, many of the worries and concerns had disappeared, and the major indexes ended with relatively small losses. The S&P 500 lost 0.7%, the Nasdaq 100 QQQ was down 0.8%, and the Russell 2000 was the laggard with a loss of 1.16%. Breadth was poor at close to 3 to 1 negative, and there were 370 names hitting new 12-month lows.

The action would have been much worse, but less than an hour into the trading session, a deal with Mexico was announced that would delay tariffs for 30 days and put the Mexican National Guard on the border.

After the closing bell Prime Minister Trudeau of Canada said tariffs on Canada would also be paused for at least 30 days.

The tariff issue is not over, but the quickness of the Mexico deal indicates that Trump is using them primarily as a negotiating weapon at this point rather than a means to raise revenue. It is still very likely that tariffs on Europe are coming soon and will shake up the market once again, but if China is willing to do something about fentanyl, that may be more easily resolved.

A strong response to earnings from Palantir PLTR is helping sentiment as the stock trades up more than 15% after hours. There's a big group of reports rolling in this week, including Amazon AMZN, on Thursday, which will grab some attention.

While the market recovered quite well from the tariff scare on Monday, the issue isn’t going to go away quickly, but the dire predictions from many economists are looking questionable.

The market is quite a mess after the tariff drama, but the volatility has created some pullbacks that will be interesting once things settle back down.

Have a good evening. I’ll see you Tuesday.

At the time of publication, Rev Shark had no positions in any securities mentioned.