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On Tuesday, the stock market experienced a rollercoaster ride, initially surging before experiencing a sudden downturn. CNBC’s Jim Cramer attributed this volatility to the market’s inability to adapt to the unpredictable nature of President Donald Trump’s statements and policies.
In the morning, optimism surrounding potential negotiations between the White House and trading partners led to a significant rally, with the Dow Jones Industrial Average climbing almost 4%. However, this momentum did not hold; by the end of the trading day, the index finished down by 0.84%. The Nasdaq Composite also saw a dramatic shift, originally rising by 4.5% before closing with a loss of over 2%. Similarly, the S&P 500 began the day strong but ended up close to bear market territory, now sitting 19% below its peak in February.
The midday turnaround came after the White House announced that steep tariffs of 104% on Chinese goods would take effect on Wednesday, putting a damper on investor enthusiasm.
Cramer noted that market rebounds following extended periods of decline rarely sustain themselves. He suggested that emotional trading fueled Tuesday’s initial surge, stating, “I think that because we finished yesterday well off the lows of the day, it was like someone said, ‘Hey, the coast is clear.’ But the coast is based on facts, and right now the facts, well, they’re just not so hot.”
Although some investors might feel reassured by the notion that the market could soon hit bottom, Cramer emphasized that the near-term outlook remains bleak due to ongoing uncertainty over Trump’s tariff policies. “The short-term outlook is awful,” he remarked, highlighting the difficult position for companies like Apple, which are facing pressure to relocate manufacturing to the U.S. amid unyielding tariff negotiations. This pressure contributed to Apple shares falling nearly 5% on the day, resulting in the company losing its status as the most valuable company to Microsoft.
Cramer criticized the erratic market behavior, labeling it as “just plain stupid,” indicating that the initial rise in Apple stock underscores broader market inconsistencies. “This market just keeps getting overridden by events, all driven by the White House,” he said, expressing that investor confidence will not return until the pace of government changes slows and more prudent decisions are made.
At the time of reporting, neither Apple nor representatives from the White House had responded to requests for comment from CNBC.
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