That was fast. Wall Street's enthusiasm for the US-China trade truce has completely vanished.
The Dow dropped 500 points, or 2.1%, on Tuesday. The S&P 500 declined 2.2%, while the Nasdaq tumbled 2.7%.
But investors are quickly realizing that the US-China trade war is not over. The tariffs already put in place remain. And new tariffs could be implemented if the two sides fail to make progress.
President Donald Trump underscored that point on Tuesday. Trump said that he would "happily" sign a fair deal with China but also left open the possibility that the talks will fail.
"President Xi and I want this deal to happen, and it probably will," Trump tweeted. "But if not remember... I am a Tariff Man."
Investors have also grown worried about fluctuations in the bond market. The gap between short and long-term Treasury rates has narrowed significantly this week. An inversion of the yield curve, meaning short-term rates are higher than long-term ones, is widely believed to signal a looming recession.
- Dow sinks 500 points as trade truce enthusiasm fades
- Markets Right Now: Dow trades above 25,000 points
- Dow drops 1,175, biggest-ever point drop
- Dow soars 1,086 points in a miraculous comeback
- Dow falls 400 points as recession indicator flashes red
- Comets drop eighth straight as playoff hopes continue to fade
- Dow Jones industrials cross 26,000
- Fed chair pushes stock rally even higher, Dow rises 800 points
- 500 Homes Receive Free Smoke Detectors
- Marriott says 500 million Starwood accounts compromised