(Bloomberg) — US stocks buckled again after Donald Trump’s latest trade-war salvo against Canada, with the S&P 500’s three-week rout now at 10% and megacap technology resuming a selloff that’s wiped out trillions in value.
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The S&P 500 lost another 1.5% Tuesday, while the Dow Jones Industrial Average slid 1.7%. Selling was broad, with more than 400 S&P stocks lower. Energy, materials and industrials shares bore the brunt of selling on the headlines that Trump was ramping up tariffs on metals from Canada. A slew of poor earnings outlooks from airlines and consumer stocks added to the downdraft. The Cboe Volatility Index spiked above 29 amid the turbulence. The Nasdaq 100 fell 1.2%.
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Trump said he was increasing the steel and aluminum tariff on Canadian goods to 50% to retaliate against Ontario’s move to place a levy on electricity imported from the US. The tariffs are expected to take effect Wednesday. Trump said he would also “substantially increase” other tariffs on Canada on April 2 if the country does not drop tariffs on dairy products and other US goods.
The threats come after Trump’s on-again, off-again trade policies have sent measures of consumer and business sentiment sliding amid growing anxiety the American economy will slow, if not fall into a recession.
“Another day, another tariff announcement,” said Ryan Grabinski, Director of Investment Strategy, Strategas Asset Management, LLC. “The same way it’s going to be hard for consumers to make big ticket purchases or businesses to make capital investment decisions, its going to remain difficult for investors to step in and decisively buy until we start to see some of the positives that were largely expected from the Administration.”
Trump is slated to address top chief executives and Wall Street bank leaders later Tuesday in Washington, amid growing unrest that the president’s policies have upended the business environment to an extent that threatens growth and investment. Data Tuesday showing US job openings rose in January, indicating steady demand for workers, temporarily boosted labor-market sentiment, though the data is somewhat dated.
The ongoing uncertainty over tariffs and government job cuts pushed the S&P 500 to its worst day of the year Monday, after it notched one of its worst weeks this century relative to the rest of the world last week.
