Dow recoups most of 600-point loss on Ukraine, Canada developments
Stocks on Tuesday erased most of their losses in a volatile session as positive news on U.S. relations with Canada and Ukraine helped offset concerns spurred by an escalation in President Trump’s trade wars.
After a 662-point drop, the Dow Jones Industrial Average lately stood at 41,747, down 164 points, or 0.4%, with two-thirds of its 30 components in the red. Verizon fronted blue-chip losses, down 7%, after the telecom warned of “soft” subscriber growth in the first quarter.Ā
Falling as much as 10% below its peak during Tuesday’s session, the S&P 500 was lately up 3.8 points, or 0.1%, at 5,621.Ā
“We have a pretty good sized correction,” said Dan Greenhaus, chief strategist at Solus Alternative Asset Management. Still, “10% declines happen more than people think,” according to Greenaus, who noted that the current drop comes after a sizable six-month rally for stocks. “We’ve basically gone straight up.”
The Nasdaq Composite also turned higher, lately up 150 points, or 0.9%, at 17,618.
The reversal coincided with word from Ukraine that it was agreeable to a U.S.-proposed truce with Russia, and Ontario Premier Doug Ford announcing he would pause a 25% surcharge on power the Canadian province sells to the U.S.
Sectors including energy and manufacturing were especially hard hit 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.Ā
The president 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,” Art Hogan, chief market strategist at B. Riley Wealth, told CBS MoneyWatch. “Unless and until we know where the goal posts actually are on trade and tariffs, this uncertainty will continue to weigh on markets.”Ā
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. Ā
“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.”Ā
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.Ā
Stocks hadĀ plunged on MondayĀ morning, continuing three consecutive weeks of losses, with the technology-laden Nasdaq marking its worst day since September 2022 and the Dow sheddingĀ 890 pointsĀ 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.”Ā
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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