Stocks pared their losses late Tuesday as the Nasdaq attempted a recovery after President Donald Trump announced he is raising tariffs on Canadian steel and aluminum to 50% and threatened higher duties on imported cars.
Tariff Impact on Markets
Trump’s move, announced on Truth Social, claimed that these tariffs would “essentially, permanently shut down the automobile manufacturing business in Canada.” He added, “Those cars can easily be made in the USA!”
The S&P 500 edged closer to correction territory, slipping 0.5% to around 5,580. The Dow Jones Industrial Average (^DJI) dropped roughly 400 points, or 1%, weighed down by a decline in Verizon (VZ) shares. Meanwhile, the Nasdaq Composite (^IXIC) reversed earlier losses, climbing 0.3%.
Volatility Following Monday’s Sell-Off
The market turbulence follows Monday’s steep losses, where the Nasdaq plunged 4% in its worst single-day drop since 2022, dragged down by declines in the “Magnificent Seven” megacap stocks. Tesla (TSLA) saw a modest rebound Tuesday after receiving public support from Trump.
Wall Street sentiment has darkened as investors weigh the risks of stagflation, exacerbated by deep corporate economic forecast cuts and uncertainty surrounding growth.
Key Inflation Data Ahead
Labor market data released Tuesday largely aligned with expectations, keeping investor focus on upcoming inflation reports. February’s Consumer Price Index (CPI) report is set for release on Wednesday, followed by the Producer Price Index (PPI) on Thursday.
