Markets swing as Trump doubles tariffs on Canadian steel and aluminum, adding uncertainty for investors
On Tuesday, Wall Street saw further declines after US President Donald Trump escalated trade tensions, as reported by BNN Bloomberg.
The S&P 500 briefly fell more than 10 percent below its record high from last month, marking a volatile trading session.
The S&P 500 closed down 0.8 percent after fluctuating between gains and a 1.5 percent drop.
The Dow Jones Industrial Average fell 478 points, or 1.1 percent, while the Nasdaq composite slipped 0.2 percent.
Tuesday’s turbulence continued the erratic market behaviour seen in recent weeks as investors reacted to Trump’s tariff policies.
Stocks have generally declined amid uncertainty over how much economic disruption Trump is willing to endure to push his agenda.
The latest moves by Trump and statements from the White House did little to clarify the situation.
Markets opened lower after Trump announced plans to double tariffs on steel and aluminum from Canada.
He cited a response to policy changes in a Canadian province that followed his tariff threats.
Trump has acknowledged that tariffs may cause economic “disturbance.”
However, when asked on Tuesday about the extent of market and economic pain he is willing to accept, White House press secretary Karoline Leavitt declined to provide specifics.
She reiterated that “the president will look out for Wall Street and for Main Street.”
Trump later posted on social media: “The only thing that makes sense is for Canada to become our cherished Fifty First State. This would make all Tariffs, and everything else, totally disappear.”
Markets recovered briefly after Ontario’s premier, Doug Ford, announced the removal of an electricity surcharge that had angered Trump.
The premier expressed confidence that Trump would also reconsider his planned 50 percent tariffs on Canadian steel and aluminum.
Despite this temporary boost, stocks declined again toward the market close.
The ongoing trade conflict has added to economic uncertainty, with companies and consumers increasingly cautious. Tariffs directly impact prices for US consumers and global trade.
Even if their effects are limited, market volatility could lead businesses and households to hesitate, potentially slowing economic growth.
Delta Air Lines reported a shift in consumer confidence, leading to weaker demand for close-in bookings. The airline’s stock fell 7.3 percent after it cut its first-quarter revenue growth forecast to 3 to 4 percent, down from an earlier projection of 7 to 9 percent.
Southwest Airlines also lowered its revenue outlook, attributing the adjustment to reduced government travel, California wildfires, and weakening demand.
However, its stock rose 8.3 percent after announcing plans to charge for checked bags and introduce loyalty program changes.
Oracle shares dropped 3.1 percent after reporting earnings and revenue below analyst expectations.
Despite broader market declines, some Big Tech stocks stabilized after recent heavy losses.
Tesla rose 3.8 percent following Trump’s declaration that he would buy a Tesla to support “Elon’s ‘baby.’”
Tesla’s stock remains down 42.9 percent this year as its sales and brand face pressure amid government spending cuts.
Other major technology firms also showed resilience.
Nvidia gained 1.7 percent, reducing its year-to-date decline to 19 percent. The company has been affected by market sell-offs, particularly in stocks perceived as overvalued amid the AI investment boom.
Given their massive market capitalization, the performance of Tesla, Nvidia, and other major tech firms significantly influences the S&P 500 and other indexes.
By the end of trading, the S&P 500 had dropped 42.49 points to 5,572.07, while the Dow fell to 41,433.48, and the Nasdaq slipped to 17,436.10.
International markets also declined. European and Asian indexes saw losses, though Shanghai’s stock market rose 0.4 percent. Hong Kong’s market remained nearly unchanged as China’s national congress concluded with economic stimulus measures.
In the bond market, Treasury yields edged higher. The 10-year Treasury yield increased to 4.28 percent from 4.22 percent on Monday. Earlier this year, it neared 4.80 percent before falling on concerns about the US economy.
A labour market report released Tuesday showed US employers had 7.7 million job openings at the end of January, in line with economists' expectations.
The data indicated that, despite market volatility, the US job market remained stable as the economy continued its momentum from late last year.
