March 4 (Reuters) - Investors are bracing for more U.S.

stock market volatility when President Donald Trump delivers an

address to Congress on Tuesday evening, on the heels of his

implementation of new tariffs that rattled asset prices earlier

in the day.

The president's remarks come at a pivotal point for markets,

as the post-election wave of exuberance and excitement has given

way to anxiety that Trump's policies are weighing on economic

growth and contributing to inflation.

"A lot of where we are headed next really does depend on

what is in this speech," said Steve Sosnick, market strategist

at Interactive Brokers. "Investors will be looking for any signs

that Trump remains a friend of the markets."

The benchmark S&P 500 has given up its gains for the

year and is now in negative territory for 2025. The tech-heavy

Nasdaq Composite at one point on Tuesday was down more

than 10% from its mid December peak, before recovering somewhat.

Major U.S. stock indexes fell in a volatile session on

Tuesday after Trump's

new 25% tariffs

on imports from Mexico and Canada took effect, along with a

doubling of duties on Chinese goods to 20%.

"Sentiment has shifted incredibly quickly from excitement

about a new Trump administration to fear," said Tim Urbanowicz,

chief investment strategist for Innovator Capital Management.

"Everyone had been focused on the pro-growth policies, and I

don't think investors were taking him seriously when he talked

about tariffs, but now that threat has materialized and created

a growth scare."

Jim Carroll, senior wealth advisor at Ballast Rock Private

Wealth Management, noted the Cboe Volatility Index has

been rising steadily in recent trading sessions. On Tuesday it

briefly broke above 26, with any level higher than 20 seen as a

sign that stock market participants are uneasy.

"Underneath the surface, markets have become less and

less enthusiastic than the closing prints on the S&P 500 told

us," said Carroll.

Colin Graham, London-based head of multi-asset strategies

for Robeco, is already preparing for still more uncertainty.

"We've taken off our bullish trade on the 10-year Treasury,

and gone back to being neutral on stocks," Graham said. "We're

in the camp of let's take less risk while we see how things play

out."