Stocks erase massive gains to end deep in the red on eve of reciprocal tariffs

The stock market’s recovery off the lows on Monday and early gains on Tuesday was a story of traders hoping and looking for off-ramps from reciprocal tariffs slated to go into effect at midnight. On Tuesday afternoon, the tale of the tape was traders driving in reverse on that off-ramp to create a major wreck on the highway.

The catalyst? Confirmation that the White House is going through with 104% tariffs on goods from China, not to mention the rest of the reciprocal tariffs.

The S&P 500 and Nasdaq 100 erased gains of 4% to finish 1.6% and 1.9% lower, respectively. The Russell 2000 gave up a 3% gain to finish 3% lower.

To say the market has been volatile would be an understatement: per Bespoke Investment Group, the past two days have been the first time in history that the Nasdaq 100 was down 4% only to finish positive, and then followed that up with a session where it was up 4% but ended in the red.

Every S&P 500 sector ETF fell, with materials, real estate, energy, consumer discretionary, and tech all off at least 2%.

The reversals were massive. Nvidia erased a gain of 8% to finish down 1.4%. Apple has nearly erased a year’s worth of gains, hitting a new low for 2025.

Levi’s surged after beating Q1 earnings, with the denim giant saying the impact of tariffs would be de nada. However, traders changed their minds, sending the stock from up 16% to down 8%.

Cannabis company Tilray cratered after missing on sales.

Some relative bright spots: health insurance stocks like Humana and UnitedHealth were the S&P 500’s top and third-top gainers, respectively, following reports that the Trump administration will boost payout rates for Medicare Advantage insurers. Broadcom rallied after management authorized a $10 billion buyback plan. Carnival gained after announcing an order for two new ships. And Boeing managed to stay in the green after reporting a significant improvement in first-quarter jet deliveries.