Dow Jones Sees Wild Ride Amid Conflicting Policy Shocks

The Dow Jones Industrial Average experienced a wild ride on Tuesday, oscillating between gains and losses. The index started strong, building a 300-point advance before handing back every point of it in a single session. This volatility was due to conflicting policy shocks from both the US Treasury and Ottawa.

On one hand, the decline in Treasury yields and a boost from chip stocks, led by Nvidia's (NVDA) Wednesday evening results, fueled the initial gain. However, this momentum was short-lived as consumer confidence for August came in lower than expected, at 89.4, down 0.8 points from July. The housing figures also disappointed, with new home sales falling 10.5% MoM in July and the June Housing Price Index coming in flat.

The Canadian government's retaliatory measures against US tariffs, which matched Washington's rates for rate, further weighed on the market. Ottawa's list of targeted American goods includes steel and aluminum at 50%, among other categories that heavily impact companies like Caterpillar (CAT) and Home Depot (HD).