Stocks closed mostly lower yesterday with only the Dow eking out a small gain.

The markets, after hitting their worst levels of the day in the morning, hit their best levels of the day in the early afternoon. But by the close, most of the intraday gains were given back, and stocks finished largely under water.

Worries over upcoming tariffs, and a degree of uncertainty around the timing of extending the 2017 tax cuts (and more), that are set to expire later this year, is weighing on stocks.

President Trump's comments late in the day saying that tariffs on Canada and Mexico would go ahead as planned dragged stocks lower.

The jury is still out on whether these and other tariffs (like the reciprocal ones he expects to put on all of our other trading partners who levy them on us) will cause inflation or not.

However, I think the worries over tariffs right now is just a convenient excuse to pull some profits after a fantastic start to the year. (It was no more than 4 days ago that the S&P 500 hit its 4th new all-time high of the year, while the Nasdaq was within striking distance of breaking out to new highs of their own.)

What changed in the last 4 days? Nothing really. The tariff talk is not new. And while President Trump's comments yesterday are, the market was pretty much expecting the tariffs anyway.

Once this spate of weakness of is over, I expect we'll be getting ready for the next leg up.

In other news, yesterday's Chicago Fed National Activity Index came in at -0.03 vs. last month's 0.18. The 3-month moving average was at 0.03, an improvement over last month's 3-month average snapshot of -0.13.

The Dallas Fed Manufacturing Survey showed the General Activity Index declined to -8.3 vs. last month's 14.1. The Production Index fell to -9.1 vs. last month's 12.2.

Today we'll get the Case-Shiller Home Price Index, the Richmond Fed Manufacturing Index, and Consumer Confidence.

We'll also get more earnings with another 257 companies on deck to report, including Home Depot and Keurig Dr. Pepper before the open, with Intuit, Workday and CAVA Group going after the close.

But the earnings announcement most are waiting for is tomorrow's (Wednesday) earnings from NVIDIA after the close. Plenty of other big name companies are set to report as well. But NVIDIA has become synonymous with AI and is being looked at as a barometer for the health (spending) on AI. So all eyes will be on them.

Although, I do want to say, whether Wednesday's numbers send shares up or down, the AI boom looks like it's here to stay, as the technology is expected to transform virtually every industry in some way shape or form, as well as impact ordinary lives.

This looks to be as big, if not bigger, than the personal computer, the internet and the mobile phone. Indispensable staples in virtually everyone's lives, as AI is expected to be as well.

Just be sure not to confuse short-term gyrations with long-term outlooks.

Last week's lower close was a tough one.

We'll see if the markets are able to regroup and try to get a rebound going.

See you tomorrow,