LIVE MARKETS-Wall Street ends sharply lower, wipes out earlier gains

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

WALL STREET ENDS SHARPLY LOWER, WIPES OUT EARLIER GAINS

Shares on Wall Street fell again on Tuesday, erasing steep gains earlier in the session, as the Trump administration confirmed that the 104% tariff on U.S. imports of Chinese goods will take effect on Wednesday.

The S&P 500 .SPX closed below the 5,000 level for the first time in roughly a year.

The U.S. move came after China vowed to "fight to the end" and will never accept the "blackmail nature" of the U.S. and Trump's threat to ramp up tariffs on Chinese imports.

United States Trade Representative Jamieson Greer added to the unease as well, saying earlier that exemptions to global tariffs are not expected in the near term.

"If no respite is delivered in the coming hours, American businesses and consumers will be hit with an unprecedentedly violent and material rise in import costs, and exporters will undoubtedly suffer severe consequences as other countries retaliate with measures of their own," writes Karl Schamotta, chief market strategist, at Corpay in Toronto.

The Federal Reserve's hands for now seemed tied: it can't cut rates quickly because inflation is likely to rear its ugly head again with the tariffs. And yet it is looking straight at recession if consumer demand contracts due to higher prices and businesses shut down.

The fed funds futures on Tuesday have priced in 109 basis points of easing, most likely starting at the June meeting. The odds of a 50 bp cut in June rose to nearly 70%.

Here is the closing market snapshot:

(Gertrude Chavez-Dreyfuss)

*****

FOR TUESDAY'S EARLIER LIVE MARKETS POSTS:

AMID LAST WEEK'S CARNAGE, BOFA CLIENTS STEPPED UP - CLICK HERE

BITCOIN SQUEEZED, BUT NOT QUITE CRUSHED BY TARIFF VOLATILITY - CLICK HERE

GO LONG DURATION IN BOND PORTFOLIOS AS US RECESSION LOOMS -BCA - CLICK HERE

FEAR FACTOR: SMALL BUSINESS OWNERS TURN PESSIMISTIC, CONSUMERS PAY DOWN THEIR PLASTIC - CLICK HERE

WALL STREET SURGES: A TECHNICAL BOUNCE, MAYBE? - CLICK HERE

NASDAQ COMPOSITE BOUNCES OFF SOME BIG SUPPORT - CLICK HERE

Q1 EARNINGS: EXPECT TIGHT-LIPPED CAUTION - CLICK HERE

UBS'S THREE "PUTS" FOR A MARKET REVIVAL - CLICK HERE

85% OF THE STOXX FLASHING GREEN, VOLATILITY STAYS HIGH - CLICK HERE

EUROPE BEFORE THE BELL: BOUNCE FROM 14-MONTH LOWS - CLICK HERE

RAY OF HOPE OR FALSE DAWN FOR MARKETS? - CLICK HERE