Tuesday's session marked a partial recovery from Monday's broad sell-off. After a wobbly morning, the major market indexes rose in unison. The stabilization started around 10:30 a.m. ET and held firm as of 1:45 p.m. ET.
Right now, the S&P 500 (^GSPC 1.26%) is up by 0.8%, in lockstep with the Dow Jones Industrial Average (^DJI 1.37%). The more volatile Nasdaq Composite (^IXIC 1.52%) posted a steeper increase of 1.1%.
AI fears and tariff chaos rattled investors on Monday
Monday was one of those days where everyone panicked at once.
Artificial intelligence (AI) expert Anthropic said its AI could help modernize old COBOL code and suddenly IBM (IBM 0.56%) lost 13% of its value like its consulting business was going out of style.
A post on the Substack social media service speculated about AI eating various industries, inspiring another round of investor nerves.
And the tariff policy uncertainty intensified after the Supreme Court struck down President Trump's emergency-powers tariffs on Friday. Instead of backing down, Trump raised his global tariff rate to 15%. With sudden policy swings and lots of legal challenges, it's hard to say what the effective tariff rates will be next week, next year, or in the long haul. That's bad news for growth stocks and other high-risk investments.
NASDAQINDEX: ^IXIC
Key Data Points
Tuesday's relief rally has a name: Claude
Tuesday's rebound came as Anthropic's live event proved less threatening than anticipated. The company positioned Claude as an "orchestration layer" that integrates with existing tools like DocuSign (DOCU 2.21%) and Salesforce (CRM +2.40%) rather than replacing them.
Investors embraced the idea of partnership and integration, sending DocuSign and Salesforce shares about 4% higher on Tuesday. They are largely back where they were on Friday.
Image source: Getty Images.
Many of the same names move several needles
Many of the tech stocks that dropped on Citrini Research's Substack post are members of the S&P 500 and Nasdaq indexes, so their recovery boosted these market meters. IBM and Salesforce are Dow Jones components, adding muscle to the oldest market index today.
All three indexes are within 3% of their scores at the end of 2025, but they are also up by 13% or more in a 52-week time frame. The long-term uptrend remains intact, but investors should expect continued volatility as AI disruption fears and tariff uncertainty play out. Tech sector bellwether Nvidia (NVDA 1.45%) reports earnings on Wednesday evening, setting the market's tone for the next few months.
