Stocks ended sharply lower on Tuesday after a late-day rally lost momentum. Investors and businesses assessed the impact of newly imposed U.S. tariffs on major trade partners.
The Dow Jones Industrial Average dropped 1.6%, while the S&P 500 declined 1.2%. The Nasdaq Composite fell 0.4%. This marked the second consecutive session of widespread losses for U.S. markets, as concerns over economic stability and uncertainty regarding the Trump administration’s policies weighed on sentiment. Both the S&P 500 and Nasdaq have now erased all gains posted since the November presidential election.
U.S. Tariffs and Global Retaliation
Overnight, the U.S. implemented 25% tariffs on Canada and Mexico and doubled tariffs on China to 20%. In response, Beijing and Ottawa announced retaliatory tariffs, while Mexico plans to unveil countermeasures on Sunday. The White House argues that tariffs will promote investment and domestic manufacturing, but investors worry they could increase inflation, slow economic activity, and impact global businesses.
Retail and Auto Stocks Decline
Target (TGT) shares fell 3% despite reporting better-than-expected earnings, as the company warned that consumer uncertainty and tariffs could affect future performance. Best Buy (BBY) plunged 13%, citing concerns that higher prices from tariffs may hurt sales.
The auto sector also suffered. Stellantis (STLA) and General Motors (GM) declined over 4%, while Ford (F) dropped nearly 3%. Automakers face major risks as tariffs raise production costs.
Financial Sector Leads Market Decline
Banking stocks were hit hard amid economic uncertainty. Bank of America (BAC) and Citigroup (C) lost more than 6%. Wells Fargo (WFC), JPMorgan Chase (JPM), Goldman Sachs (GS), and American Express (AXP) also declined, with the S&P 500 financial services sector falling 3.5%.
Mixed Performance in Tech Stocks
Tech stocks had a mixed session. Tesla (TSLA) dropped 4%, extending its year-to-date decline of nearly one-third of its value. Apple (AAPL), Amazon (AMZN), and Meta Platforms (META) also closed lower. Nvidia (NVDA) rebounded 2% after falling 9% on Monday. Microsoft (MSFT), Alphabet (GOOG), and Broadcom (AVGO) posted modest gains.
Standout Gainers
Some stocks defied the market downturn. Super Micro Computer (SMCI) surged 8% after plummeting 13% on Monday. Walgreens Boots Alliance (WBA) rose 6% on reports of a $10 billion buyout deal. Strategy (MSTR), a major bitcoin holder, soared 10%.
Bitcoin and Treasury Yields
Bitcoin rose to $87,300, up from $81,500 earlier in the day but down from the $95,000 peak reached after Trump announced a crypto strategic reserve.
The 10-year Treasury yield climbed to 4.24% in late trading, up from 4.18% on Monday. It touched 4.11% earlier in the day, marking its lowest level since October.
Commodities Update
Gold futures gained 0.9%, reaching $2,930 per ounce. Meanwhile, West Texas Intermediate (WTI) crude oil fell 0.5%, settling at $68.05 per barrel.
Markets remain volatile as investors assess the economic impact of trade policies and global retaliatory measures.
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