Another red day on Wall Street: Trump's latest tariff threats bring the market-cap wipeout to $5 trillion
- The stock market faced another huge bout of volatility on Tuesday amid the latest tariff news.
- The decline accelerated following Trump’s tariff threats on Canadian metal imports.
- The Dow closed down by 423 points on Tuesday, after falling as much as 704 points.
The stock market saw another surge of volatility, with investors sent on a roller-coaster ride amid the latest tariff moves from the White House.
After a brutal sell-off in Monday’s session, the carnage continued for investors on Tuesday, with markets plunging a day after a huge rout marked the worst session for the Nasdaq since 2022.
President Donald Trump’s threats on Tuesday to double tariffs on metal imports from Canada only added to the pressure.
Major indexes all ended lower, though the Dow Jones Industrial Average pared the deepest losses, rebounding slightly following news that Canada and the US could begin negotiating over trade policy.
After flipping from red to green all day, the Nasdaq Composite ended lower, while the S&P 500 also logged another loss.
Here’s where major indexes stood at the 4 p.m. closing bell on Tuesday:
The wipeout in recent weeks has been a result of investors’ reactions to Trump’s tariff policy and his commitment to pushing forward with a trade war against some of America’s biggest partners, including Canada and Mexico.
No sector has been spared, but the decline has been particularly painful for the highest-flying growth names. Nvidia stock alone has shed more than $1 trillion in value since it peaked in early January, with its stock down about 30%, and the AI trade broadly has suffered amid growth concerns and waning enthusiasm among investors.
The sharp and sudden decline accelerated after Trump dug in his heels and continued to threaten tariffs against America’s allies.
The president said in a post on Truth Social Tuesday that he instructed his commerce secretary, Howard Lutnick, to place an additional 25% tariff on Canadian steel and aluminum.
The move would bring the total tariff rate for steel and aluminum imports from Canada to 50%. The tariff escalation is in retaliation for Ontario imposing a 25% tariff on the electricity it exports to the US.
Shares of automakers and industrial companies, which count steel and aluminum as major inputs, were immediately impacted by the news.
General Motors and Ford each declined as much as 4%, while the industrials sector declined about 2%, double the S&P 500’s decline of 1%.
Meanwhile, the S&P 500 ended the day just shy of entering correction territory, which is defined as a 10% decline from its prior high. The index is down about 9% since its February 19 record.
Trump, for his part, appears unfazed by the stock market weakness. In an interview on Sunday, he told Fox News that he refused to rule out the possibility of a recession hitting the economy.
Unlike his first term, the president has indicated that the administration is focusing less on the stock market and more on reducing borrowing costs by pushing the 10-year Treasury yield down.
Trump has also threatened more tariffs are coming, with an April 2 date set for a 25% tariff on all goods imported from Europe.