The stock market made a strong comeback on Tuesday after a difficult start to the week. The S&P 500 rose by 2.5%, recovering most of the losses it had seen on Monday. This jump was led by major tech companies such as Apple, Amazon, and Meta. Investors, who had been anxious about market instability, found a reason to be hopeful again after weeks of tension.
The main reason behind the rally stemmed from an unexpected source—comments made by U.S. Treasury Secretary Janet Yellen. During a closed-door investor summit hosted by J.P. Morgan in Washington, D.C., Bessent told a room full of major investors that the ongoing tariff standoff with China was “unsustainable.”
This private meeting wasn’t open to the public, but news of it was quickly reported by Bloomberg. Once the report came out around midday, stock prices jumped, with investors clearly reacting to what sounded like the beginning of a softer approach to tariffs.
This moment was a big deal for the markets, which have been rattled by President Trump’s aggressive trade policies. For many weeks, stocks had been struggling to remain stable, and investors were seeking any positive signs. Bessent’s remarks seemed to give them that. He did not promise that the tariffs would be removed immediately, but he strongly hinted that the current trade war couldn’t go on much longer, which made traders feel more confident.
Meanwhile, something unusual was happening with the U.S. dollar. Normally, during uncertain times, investors tend to move their money into the dollar because it is seen as a safer currency. But during this tariff war, the opposite has happened. Instead of getting stronger, the dollar has weakened. This is because many people are unsure about what the U.S. government will do next. Policy shifts, sudden announcements, and threats have made the financial environment more unpredictable than usual.
Still, there was a small moment of relief on Tuesday. As the stock market bounced back, the dollar managed to stabilise for a bit. But it may not last long. According to a new Global Fund Manager Survey by Bank of America, 61% of participants believe that the dollar will continue to lose value over the next 12 months. That shows a lack of trust in how things are being handled.
At the same time, other forms of investment have been gaining popularity. Bitcoin, for example, rose above $90,000 for the first time in over a month. Many supporters of Bitcoin argue that it can serve as a form of insurance or protection against unstable, government-backed currencies. Some experts even believe that Bitcoin has now moved beyond simply following stock market trends. It is starting to behave like its own independent asset class.
Gold also had a strong day. It briefly rose above $3,500 an ounce, another sign that investors are seeking safer options. Gold has long been regarded as a secure investment during times of economic stress. The fact that both Bitcoin and gold have increased in value shows that many people remain nervous about what might happen in the global economy.
Even though the market saw a rise on Tuesday, experts are warning not to celebrate just yet. There are still many risks to be aware of. One of the biggest concerns is President Trump’s threat to fire Federal Reserve Chair Jerome Powell. Moves like that could seriously impact how investors view the U.S. economy. If the independence of the Federal Reserve is questioned, it could lead to bigger issues.
Bank of America Securities also released a new report on Monday. In it, they lowered their forecast for global economic growth by 0.3 percentage points. That might not seem like a lot, but in economic terms, it’s significant.
They said the main reason for the downgrade is the ongoing uncertainty caused by Trump’s tariff decisions. The report made it clear that while they don’t expect a full-blown recession right now, the chances of one happening have increased. In fact, they’ve put the odds of a recession at 35%, which is enough to make investors uneasy.
The U.S. government has also been discussing new trade agreements with countries such as Japan and India. Officials have suggested that agreements are close, but reports from sources like Politico paint a different picture.
According to those reports, these are not going to be full trade agreements but rather memoranda of understanding. That means the discussions will likely drag on for months, with no clear outcomes in the near future. This uncertainty is yet another factor adding to market instability.
To make things more complicated, the earnings season is currently underway. This is when major companies announce their quarterly results, and it often causes stock prices to move sharply. One example is Tesla, the electric car company led by Elon Musk.
Its stock has already fallen about 15% over the past month. On Tuesday evening, the company announced that its net income had decreased by 71% in the first quarter. This is partly due to rising competition from overseas companies and the confusion around Musk’s leadership role at Tesla.
All of these points point to a larger theme: even though Tuesday’s rally was a welcome break from the recent declines, the overall market situation is still very shaky. Investors are reacting to headlines, rumours, and private meetings, which means things can change quickly.
The tariff war, unpredictable government policies, and global economic uncertainty continue to hang over the markets like a cloud. While some are hopeful that talks with China and other countries will lead to real progress, many are still bracing for more ups and downs in the coming weeks.
Disclaimer: This article has been meticulously fact-checked by our team to ensure accuracy and uphold transparency. We strive to deliver trustworthy and dependable content to our readers.
Jon King is an experienced journalist with 3 years of experience in the field. With a strong background in investigative reporting, Jon is known for his in-depth coverage of crime news, finance news, local news, and USA news. Currently working with Mikeandjonpodcast, Jon brings his sharp investigative skills, where he provides timely updates and analysis on a wide range of topics. His commitment to delivering accurate and impactful news has earned him a reputation for providing insightful and comprehensive stories that resonate with his audience.
