Early on Tuesday, there was optimism for a market rally dubbed 'Turnaround Tuesday' due to high hopes for positive tariff negotiations. However, by the end of the trading day on Wall Street, those expectations were shattered.

Steven Sosnick, the chief strategist at Interactive Brokers, noted that investors quickly return to the market at any hint of good news as they fear missing out on potential gains. Despite the major indexes surging by over 4% at one point during the day, they closed in negative territory.

The S&P 500 dropped by 1.6%, the Nasdaq Composite by over 2.1%, and the Dow Jones Industrial Average by 0.8%, losing 320 points. The S&P 500 closed at 4,982, its lowest point since April 19, 2024.

The market was heavily influenced by tariff-related news, with stocks reacting quickly to the White House confirming increased tariffs on China. This led to a swift reversal of gains and further losses towards the end of the trading day.

Market volatility has been a recurring theme, with uncertainty surrounding tariff negotiations driving the recent fluctuations. Investors are closely monitoring developments in trade talks as they try to navigate the market's erratic behavior.

Mark Newton, the global head of technical strategy at Fundstrat, emphasized the importance of seeing progress in the negotiation process promptly to provide some stability to the markets.

In addition to stocks, the bond market also experienced fluctuations, with the 10-year Treasury yield rising to 4.25% on Tuesday amid concerns that tariff implications could impact economic growth and drive investors towards safer assets like bonds.