S&P 500 Steadies Before Trump Liberation Day Tariffs

The S&P 500 attempted a meagre recovery on Tuesday, rising about 0.4% and having rebounded off earlier losses. It marked a positive first day of the second quarter on Wall Street following a 4.6% decline in the first three months of the year, the worst first quarter since 2022. 

The indecisive market session on Tuesday symbolized a lull in trading activity as investors awaited fresh tariff news on the so-called ‘Liberation Day’ due to be announced on Wednesday at 20:00 GMT (4 pm Eastern Time).

S&P 500 (ES) Price Performance Chart

The S&P 500 stock index has found support at a rising trendline connecting the lows formed in April and July 2024 as well as last month. A rebound from here would offer greater hope of a full recovery and a return to record highs, while a break below it would be an indication that the uptrend, which began in November 2024, has ended.

At the same time, investors are paying close attention to correction territory for the index, which fell about 10% from the record high formed on 19 February.

*Past performance does not indicate future results 

Latest News on Tariff Details

After weeks of speculation, the details of US President Donal Trump’s planned new tariffs on trading partners will be revealed Wednesday late afternoon at an announcement given at the White House Rose Garden.

While the full details are yet to be revealed, the things understood to be true are that the tariffs will go into effect immediately. The lack of ‘grace period’ could up-end the for-now peaceful markets, which have been taking a breath after a turbulent first quarter of 2025.

There was reportedly consideration of a blanket 20% universal tariff as well as targeted tariff rates on individual countries. 

Treasury Secretary Scott Bessent told Republican members of the House of Representatives on Tuesday that the reciprocal tariffs would act as a "ceiling" for the highest US tariff rates countries might face, and that these rates could be lowered if those countries comply with the administration’s demands, according to Republican Representative Kevin Hern.

A month-long exemption from the 25% fentanyl-related tariffs on most Canadian and Mexican goods is also set to expire on Wednesday, and new tariffs will be on top of the 25% global levy on auto imports. (Source: Reuters)

Learn more about what are tariffs in our in-depth article. 

Retaliatory Tariffs 

Ursula von der Leyen, the head of the European Union’s executive, said, “We do not necessarily want to retaliate but if it is necessary, we have a strong plan to retaliate, and we will use it” in a speech on Tuesday. Also added that Europe was “open to negotiations.”

Likewise, Canadian Prime Minister Mark Carney told the media on Tuesday. "We will put in place retaliatory measures if there are additional measures put against Canada tomorrow.”

Economists say the uncertainty surrounding potential retaliatory tariffs- how other countries might respond with their own measures - makes it difficult to predict the impact on everyday consumer goods.

Conclusion

With details of the new US tariffs set to be revealed, uncertainty continues to cloud the outlook for the S&P 500. While the index has managed to stabilise off recent lows, the threat of immediate tariff implementation alongside the unknown scale of global retaliation adds a layer of risk to the market’s next move. 

Whether the index holds its trendline support or slips into correction territory may well depend on how markets interpret the upcoming policy shock and how trading partners respond in the days ahead.

Only time will tell what lies ahead.

*Past performance does not indicate future results