The stock market is starting to stabilize on Tuesday morning after the S&P 500, Dow Jones, and Nasdaq futures plunged at the start of the week.
According to analysts, the reason for stock market volatility has to do with sweeping tariffs from U.S. President Donald Trump, who says the tariffs are not going away.
Finance journalist Bryan Borzykowski said though things are starting to improve, it doesn’t mean it’s bounced back entirely.
“This is just today,” he said in an interview with CTV Morning Live on Tuesday.
“It’s been after many declines over the last few days, so the market is still down quite a bit from where it was at the start of the year, last week. So, a little bit of reprieve today, but we’ll see where it goes.”
Boyrzykowski added that the stock market is seeing its worst trading days since the COVID-19 pandemic, with the S&P 500 entering bear market territory, which is when the stock market falls by 20 per cent off its most recent high.
“In COVID, the whole economy shut down,” he said.
“This time it’s really kind of a man-made tariff trade war that’s causing this.”
Borzykowski explained that the markets are reacting this way due to the unprecedented nature of this trade war, which is upending supply chains and the global economy.
He added that recession fears are picking up, as people face higher prices and layoffs.
“Nobody is certain how this ends, where does this go? We haven’t seen this,” he said.
“That’s why markets are reacting, because it’s all very, very uncertain.”
For those who are worried, Borzykowski said not to panic.
He added that it’s not a good idea to pull all of your money out of the stock market because you don’t know when you’re going to get back in.
“That’s the thing, you can’t time the markets,” he explained. “It’s really easy to pull the money out now… But anything can change.”
- With files from CTV’s Rachel Lagacé.
