Dow loses nearly 500 points in another day of tariff uncertainty
Stocks racked up heavy losses for a second day on Tuesday in a volatile session that had investors fixated on President Trump’s ever-evolving trade war with Canada and the direction of the U.S. economy.
“Unless and until we know where the goal posts actually are on trade and tariffs, this uncertainty will continue to weigh on markets,” Art Hogan, chief market strategist at B. Riley Wealth, told CBS MoneyWatch.Â
After a 662-point drop, the Dow Jones Industrial Average closed at 41,433, down 478 points, or 1.1%, with 24 of its 30 components in the red. Verizon fronted blue-chip losses, dropping 6.6%, after the telecom warned of “soft” subscriber growth.
After a brief turn higher, the S&P 500 shed 42 points, or 0.8%, to finish at 5,572. At its daily low, the index was 10% below its record close notched last month.Â
“Ten percent declines happen more than people think,” said Dan Greenhaus, chief strategist at Solus Alternative Asset Management. The current decline comes after an extended six-month rally for stocks, he noted. “We’ve basically gone straight up.”
Sectors including energy and manufacturing were hit especially hard by Mr. Trump’s decision to hike tariffs even more on imports of steel and aluminum from Canada to 50% in response to the country’s largest province, Ontario, on Monday announcing a 25% surcharge on electricity exports to the U.S.Â
Ontario’s premier on Tuesday backed down and said he would pause the levy, with President Trump in turn dialing back the additional hike.Â
The Nasdaq Composite also switched to positive terrain, only to revert to losses by the close, falling 32 points, or 0.2%, to 17,436.
Mr. Trump also said he would “substantially increase” other tariffs on Canada on April 2 if it did not rescind tariffs on U.S. dairy products and other goods.
“The market has been down for three weeks in a row, largely driven by uncertainty about where trade policy lands, full stop. We’ve been inundated with tariff announcements that, unlike the 2018 playbook, are actually being applied universally versus the surgical approach we saw with term 1.0,” offered Hogan.
Shares of Stellantis thudded lower. The manufacturer of Jeep and Dodge vehicles has multiple production plants in Canada, and could be impacted by the latest escalation. Â
“That’s kind of the problem for the market, now we have to wait until April 2” to learn of possible reciprocal actions, said Greenhaus, chief strategist at Solus Alternative Asset Management. “So there’s three weeks to make it worse.”Â
The sell-off came as Citigroup strategists lowered their view of U.S. equities, echoing other banks including JPMorgan Chase in curtailing bullish takes for 2025.Â
Stocks had plunged on Monday morning, continuing three consecutive weeks of losses, with the technology-laden Nasdaq marking its worst day since September 2022 and the Dow shedding 890 points to close beneath its 200-moving average for the first time since late 2023.
The losses came a day after Mr. Trump declined to say whether he expects a recession this year, telling Fox News that “I hate to predict things like that. There is a period of transition, because what we’re doing is very big.”Â
Guidance from Delta Air Lines added to concerns about the economy, with the carrier cutting its earnings outlook amid weaker U.S. demand.
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