S&P 500 Records Worst Session Since October: Investor Sentiment Dips, Fear & Greed Index In 'Neutral' Zone

The CNN Money Fear and Greed index showed a decline in the overall market sentiment, while the index moved to the “Neutral” zone on Tuesday.

U.S. stocks settled lower on Tuesday, with the S&P 500 dipping more than 2% during the session as risk-off sentiment intensified following President Donald Trump’s aggressive new trade stance toward Europe.

Trump threatened several European countries with an additional 10% tariffs starting Feb. 1 if negotiations over Greenland control fail, with duties potentially rising to 25% from June.

European officials warned of retaliation that could affect up to 25% of U.S. exports to Europe, potentially including services, and floated the possibility of reducing Treasury holdings.

Stocks also recorded losses last week, with the S&P 500 falling 0.4% and the Dow losing 0.3%. The Nasdaq also declined 0.7% on the week.

D.R. Horton, Inc. (NYSE:DHI) reported upbeat earnings for its fiscal 2026 first quarter. Rapt Therapeutics Inc (NASDAQ:RAPT) shares jumped 64% on Tuesday after GSK announced it will acquire the company.

On the economic data front, the ADP reported that US private employers added an average of 8,000 jobs per week during the four weeks ending Dec. 27, compared to an average gain of 11,250 in the prior period.

Most sectors on the S&P 500 closed on a negative note, with information technology, consumer discretionary and financial stocks recording the biggest losses on Tuesday. However, consumer staples stocks bucked the overall market trend, closing the session higher.

The Dow Jones closed lower by over 870 points to 48,488.59 on Tuesday. The S&P 500 fell 2.06% to 6,796.86, while the Nasdaq Composite dipped 2.39% at 22,954.32 during Tuesday's session.

Investors are awaiting earnings results from Johnson & Johnson (NYSE:JNJ), Halliburton Co (NYSE:HAL) and Charles Schwab Corp. (NYSE:SCHW) today.

What Is CNN Business Fear & Greed Index?

At a current reading of 48.3, the index moved to the “Neutral” zone on Tuesday, versus a prior reading of 55.3.

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

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