Oil dropped more than 2.5% on Tuesday, erasing gains of more than 1% after the White House confirmed that President Trump will follow through on a threat to add a 50% tariff on Chinese goods, in addition to 34% reciprocal tariffs, raising the overall tariff rate on Chinese goods to 104%.

Brent (BZ=F) dropped to settle at $62.82 per barrel while WTI (CL=F) settled at $59.58, its lowest close since 2021.

Oil has slipped more than 15% since President Trump announced retaliatory tariffs against China, the biggest crude importer, and other countries on April 2.

Last week, in response to US levies, Beijing announced 34% tariffs on US-made goods. On Monday Trump threatened to impose an additional 50% tariff on imports from China unless Beijing removed their levies.

Yahoo Finance’s Dan Howley reports:

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US stocks lost steam to hit session lows as the White House confirmed the US is moving forward with 104% tariffs on China beginning at 12:01 AM ET.

“Americans do not need other countries as much as other countries need us,” White House press secretary Karoline Leavitt told reporters during a briefing. “President Trump has a spine of steel and he will not break.”

The benchmark S&P 500 (^GSPC) and tech-heavy Nasdaq Composite (^IXIC) were up 0.3% and 0.2%, respectively, with Nvidia (NVDA) rising just over 2% by the afternoon after a 7% gain earlier in the session. The Dow Jones Industrial Average (^DJI) popped roughly 0.7%, adding around 250 points. Earlier in the session, the index had added over 1,300 points.

After days of selling in the equity market that resulted in one of the sharpest three-day drops for the S&P 500 (^GSPC) since World War II, stocks are in rally mode on Tuesday.

All three of the major averages are up about 4% or more, quickly building on gains early in the session. Some of the market’s high flyers of the past few years, which had recently been crushed in the market crash, are leading the way higher too. Nvidia (NVDA) is up nearly 8%, while Tesla (TSLA) has popped more than 6% and Meta (META) has added over 5%.

“At the slightest whiff of good news, people come roaring back in because that FOMO [fear of missing out] never goes away,” Interactive Brokers chief strategist Steven Sosnick told Yahoo Finance. “It’s always there. No one, no one ever wants to miss a rally.”

While the S&P 500 didn’t officially enter a bear market on Monday, as it narrowly avoided closing 20% off its recent all-time high, stocks are trading like they normally do in a bear market, or following substantial pullback.

“If you look back through history some of the biggest short-term rallies have occurred during bear markets,” Sosnick said. “Down markets tend to see very big sharp up moves because volatility does work in both directions.”

Stocks opened higher across the board on Tuesday as President Trump confirmed in a post on Truth Social that trade talks with South Korea are “looking good” following a phone conversation between Trump and acting South Korean President Han Duck-soo.

“We have the confines and probability of a great DEAL for both countries,” Trump said. “Their top TEAM is on a plane heading to the U.S., and things are looking good. We are likewise dealing with many other countries, all of whom want to make a deal with the United States.”

The president added the US is “likewise dealing with many other countries, all of whom want to make a deal.”

According to Trump, Beijing also “wants to make a deal, badly, but they don’t know how to get it started. We are waiting for their call.”

Trade discussions with China have been tense after the country vowed to “fight to the end” on tariffs. The development comes after Trump threatened to impose an additional 50% tariff on goods from China beginning on Wednesday if the country did not scrap its plans for retaliatory duties.

The S&P 500 fell over 10% last Thursday and Friday, one of the worst two-day sell-offs we’ve seen in market history.

In response, US investors did what they’ve come to do best — buy the dip.

Data from Bank of America published Tuesday showed the firm’s clients were net buyers of $8 billion worth of stock last week, the fourth-largest weekly inflow in its data going back to 2008.

The firm noted that all three of its client groups — institutions, hedge funds, and private clients — were buyers last week. Notably, its private client group (read: individuals) has been a buyer of stocks for 17 straight weeks.

This data is just one read from one firm on where money is flowing but isn’t likely to be an outlier no matter how one goes about cutting the data. The simplest answer to questions about what investors have been doing during the tariff market crash, it seems, is “buying stocks.”

The market action Monday, in which a headline later proved to be not quite fully true sent stocks surging in a matter of seconds, suggests how eager investors seem to buy the dip and see the market recover from the tariff-induced plunge.

Initial data on how investors are putting money to work during this slide confirms that.

Stocks were poised for a rebound on Tuesday, with all three indexes surging at least 3% at the opening bell on trade deal hopes.

The benchmark S&P 500 (^GSPC) ripped 3.2% higher, while the tech-heavy Nasdaq Composite (^IXIC) jumped 3.6%. The Dow Jones Industrial Average (^DJI) popped 3.4%, adding over 1,300 points at the open.

US Treasurys continued their sharp decline on Tuesday as investors sold bonds to cover losses in other assets and rushed to adjust their expectations for significant US rate cuts, signaling potential stress in financial markets.

Reuters reports:

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