U.S. stocks ended sharply lower on Tuesday, with all three major indexes recording their worst single-day declines in nearly three months as fresh tariff threats from President Donald Trump against countries opposing the acquisition of Greenland led to massive selloffs.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) tumbled 1.8% or 870.74 points, to end at 48,488.59 points.
The S&P 500 declined 2.1%, or 143.15 points, to finish at 6,796.86 points. Tech, consumer discretionary, communication services and financial stocks were the worst performers.
The Technology Select Sector SPDR (XLK) gave up 2.9%, while the Communication Services Select Sector SPDR (XLC) fell 2.1%. The Consumer Discretionary Select Sector SPDR (XLY) fell 2.8%, while the Financials Select Sector SPDR (XLF) declined 2.2%. The Industrials Select Sector SPDR (XLI) fell 2%. Ten of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq slid 2.4%, or 561.07 points, to close at 22,954.32 points.
The fear gauge, CBOE Volatility Index (VIX), was up 26.67% to 20.09. A total of 20.6 billion shares were traded on Tuesday, higher than the last 20-session average of 17.01 billion.
Stocks Tumble After Trump’s Tariff Threat
Stocks bled on Tuesday to start a fresh holiday-shortened week, following Trump’s comments over the weekend. Trump took to social media on Saturday and threatened to impose higher tariffs on U.S. imports on eight NATO members until a “deal is reached for the Complete and Total purchase of Greenland.”
The President said that a 10% additional tariff will be imposed on Feb.1, which will go up to 25% on June 1. He also threatened to slap 20% tariffs on French wines and champagne following reports that the French President Emmanuel Macron is against joining Trump’s Board of Peace.
European leaders have since slammed Trump, calling his tariff threats “unacceptable” and have hinted at using countermeasures, which could include the “Anti-Coercion Instrument.”
Trump’s renewed tariff threats sent shockwaves across Wall Street after Tuesday’s opening bell, leading to massive selloffs as investors feared a fresh global crisis.
Tech stocks suffered the most. Shares of Apple Inc. (AAPL) declined 3.5%, while NVIDIA Corporation (NVDA) fell 4.3%.
Earnings Season Gathering Steam
Investors are also closely tracking the quarterly reports from industry bellwethers, with the fourth-quarter earnings season now gathering pace. On Tuesday, 3M Company (MMM) reported its quarterly earnings. 3M reported fourth-quarter 2025 adjusted earnings of $1.83 per share, which surpassed the Zacks Consensus Estimate of $1.82.
However, the company’s shares fell 5.1%. 3M has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The earnings season is fast gathering pace, and investors will be closely watching a slew of big companies’ quarterly results this week.
Tuesday’s declines sent both the S&P 500 and Nasdaq into negative territory for the year. The S&P 500 is now down 0.7%, while the Nasdaq is down 1.2%. Also, gold jumped to new record highs, and Treasury yields came under fresh selling pressure, driving borrowing costs higher.
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Apple Inc. (AAPL): Free Stock Analysis Report 3M Company (MMM): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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