U.S. stocks fell Tuesday as a recent sell-off on Wall Street resumed after two straight winning sessions. The Dow Jones Industrial Average dropped 260.32 points, or 0.62%, to close at 41,581.31. The S&P 500 lost 1.07%, ending at 5,614.66, bringing it near correction territory at 8.6% off its February high.
The Nasdaq Composite declined 1.71% to settle at 17,504.12. Tech stocks continued to struggle, with Tesla falling more than 5% after RBC Capital Markets cut its price target due to rising competition in the EV space. Amazon and Microsoft shares also dropped nearly 4% and 3%, respectively.
Rhys Williams, chief investment officer at Wayve Capital, said, “It does appear the market really does want to rotate into things that haven’t worked as well and out of things that did work well for the last couple of years. The markets are going to remain choppy up until whatever decision is made on April 2,” referring to President Donald Trump’s upcoming announcement on tariffs for some imports from Canada and Mexico. The declines follow recent instability marked by soft economic data and Trump’s fluctuating tariff policy, leaving investors wary of the U.S.’ financial health.
Wall Street sell-off resumes
Despite a recent recovery rally, the tech-heavy Nasdaq remains in correction territory, and all three major averages are down on the year. Investors are closely monitoring the Federal Reserve’s two-day policy meeting that began Tuesday, with traders expecting the central bank to hold rates steady based on CME’s FedWatch Tool.
Ross Mayfield, an investment strategist at Baird, said stocks could see more pullback from current levels. “Your average non-recession pullback or correction is in the 15% range, which is not all that different from what the average intra-year drawdown is over the last 40 or 50 years anyway. I don’t think that a recession is imminent, and without more significant economic weakness, I think that’s probably the extent of it.”
MicroStrategy, now known as Strategy, plans to raise about $500 million by offering a new class of preferred stock called perpetual Strife to fund more bitcoin purchases.
The company will offer five million shares at $100 per share with a 10% annual dividend rate. Dan Wantrobski, associate director of research at Janney Montgomery Scott, advised investors to brace for more downside ahead even if there is a near-term rally. “We believe there may be more upside for stocks on a short-term basis.
However, we remain cautious moving through the March-April timeframe and believe another leg lower can materialize in the coming days or weeks.”
As markets react to economic data, policy uncertainty, and earnings reports, analysts warn that volatility may persist, and investors are advised to stay alert and cautious in the coming weeks.
