NEW YORK—Wall Street experienced another downturn on Tuesday, amplifying recent concerns over President Trump’s trade policies. The stock market’s decline brought the indices closer to a 10% drop from their recent highs, sparked by the President’s decision to increase tariffs on steel and aluminum imports from Canada. This move was in retaliation to Canadian provincial actions deemed unfriendly to U.S. interests.
The S&P 500 reduced by 0.6% during the afternoon, while the Dow Jones Industrial Average suffered a more significant fall of 462 points, marking a 1.1% descent by 2:10 p.m. Eastern time. However, a minor rally in high-profile stocks such as Tesla helped the Nasdaq composite remain stable, preventing a more severe market-wide slump.
The volatility of the stock market was evident as the S&P 500 teetered near what investors consider a “correction,” which is a 10% reduction. Earlier in the day, the index had dropped as much as 1.5% after an initial modest rise, indicating increased investor anxiety.
The unpredictability of the stock market has become commonplace over the past several days, with the S&P 500 experiencing daily swings of at least 1% in seven out of the last eight sessions. This instability stems from uncertainty over the President’s tariffs and policies, which some fear could lead to substantial economic disruptions.
White House press secretary Karoline Leavitt refrained from providing a detailed assessment of how much economic hardship the administration might tolerate. She commented that the President prioritizes both Wall Street and Main Street interests.
President Trump, expressing his views on social platforms, sarcastically suggested Canada could solve the tariff issue by becoming the 51st state of the U.S., thereby eliminating any tariff disputes.
The turmoil in the stock markets has been exacerbated by additional economic warning signs amid the chaos of the evolving tariff situation. This could potentially drive consumers to reduce spending, chilling economic activity despite the intended lesser effect of the tariffs.
Delta Air Lines announced a noticeable decline in consumer confidence, negatively impacting near-term bookings. As a result, the airline cut its revenue growth forecast for the initial quarter of 2025 to 3%-4%, down from 7%-9%. The company’s stock plunged by 8.3%.
Southwest Airlines also downgraded its revenue outlook due to decreased government travel, California wildfires, and a general weakening in demand. Yet, its stock rebounded with an 8.5% rise following new baggage fee implementations and other customer loyalty incentives.
Oracle stock slipped by 5% after failing to meet market expectations for quarterly profit and revenue, contributing to the wider market losses.
Conversely, some leading tech stocks showed resilience, with Tesla gaining 4.8% after a supportive statement from President Trump. Despite being down 42.3% for the year, Tesla’s morale received a boost from Trump’s public endorsement.
Nvidia saw a 2.9% rise, easing its yearly decline, as investors bet on its recovery from recent sell-offs spurred by the hype around AI technology.
Globally, markets in Europe and Asia followed a downward trajectory, while Chinese indices saw minor positive movement as the country’s national congress implemented measures to bolster its slowing economy.
Bond markets exhibited minor steadiness with the yield on the 10-year Treasury climbing marginally to 4.26% from a prior day’s 4.22%.
In labor market news, U.S. job availability remained robust with 7.7 million job openings reported at the end of January, reflecting steady economic activity despite past year-end robust conditions.
