NEW YORK — Following President Donald Trump’s recent intensification of his , the S&P 500 has fallen more than 10% from its peak.
Earlier on Tuesday, the S&P 500 declined by as much as 1.5% before reducing its loss to 1.4%, positioning it 9.9% below its highest point. As of 1:32 p.m. Eastern time, the Dow Jones Industrial Average had decreased by 711 points, or 1.7%, while the Nasdaq composite was down 1.2%.
These declines occurred after Trump announced increased tariffs on steel and aluminum imports from Canada, doubling the planned increase to 50%. The president stated that this action was in response to measures taken by a Canadian province after Trump began threatening tariffs on one of the United States’ major trade partners.
Such unpredictable actions are becoming commonplace for investors, with the S&P 500 experiencing swings of at least 1%, either up or down, on seven occasions in the past eight days. These fluctuations reflect Wall Street’s uncertainty regarding the extent of economic hardship Trump is willing to accept through tariffs and other policies in his efforts to reshape the country and the world.
“The only thing that makes sense is for Canada to become our cherished Fifty First State,” Trump remarked, while announcing his latest escalation in the trade conflict. “This would make all Tariffs, and everything else, totally disappear.”
Tuesday’s declines also followed increased warning signs about the economy as Trump’s inconsistent implementation of tariffs generates confusion and negativity among U.S. households and businesses.
These tariffs can negatively impact the economy by increasing prices for U.S. consumers and disrupting global trade. However, even if the tariffs are less severe than anticipated, the frequent policy changes could create enough uncertainty to push U.S. companies and consumers into a state of economic stagnation.
Delta Air Lines reported late Monday that it is observing a decline in customer confidence, which is affecting demand for last-minute flight bookings. Consequently, the airline reduced its revenue growth forecast for the first quarter of 2025 by roughly half, from a range of 7% to 9% down to a range of 3% to 4%.
Delta’s stock value decreased by 8.5%.
Southwest Airlines also lowered its projection for a key underlying revenue trend, citing reduced government travel, among other factors, including California wildfires and “softness in bookings and demand trends as the macro environment has weakened.”
However, its stock increased by 8.7% after the airline announced that it would soon start charging some passengers for checked baggage and implement changes to reward its most loyal customers.
Oracle’s stock fell by 3.7% after the technology company’s reported profit and revenue for the most recent quarter fell short of analysts’ expectations.
Several Big Tech stocks helped to moderate the market’s losses, showing some stability after recent declines. For instance, Elon Musk’s Tesla increased by 2.1% after Trump announced he would purchase a Tesla to demonstrate his support for “Elon’s ‘baby.’”
Tesla’s sales and brand have faced challenges as Musk has advocated for federal government spending cuts in Washington. Tesla’s stock has fallen 43.8% so far this year.
Other Big Tech leaders, which had previously driven the market to record highs, also showed more resilience. increased by 1%, reducing its year-to-date loss to 19.6%. It has struggled as the market sell-off has disproportionately affected stocks perceived as overvalued amidst Wall Street’s enthusiasm for artificial intelligence.
A small number of these leading companies were primarily responsible for the S&P 500 reaching a record as recently as Feb. 19. Just seven companies accounted for over half of the S&P 500’s total return last year: Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla.
Citi strategists suggest they “doubt that the AI bubble is already fully played out” and that these companies could potentially lead the U.S. stock market back to its long-standing position of outperforming other global markets. However, they noted that “that is for the long term, not for the next few months,” stating that “US exceptionalism is at least pausing.”
In international stock markets, which have largely outperformed the United States this year, indexes declined across much of Europe and Asia.
Stocks in Shanghai increased by 0.4%, and were nearly unchanged in Hong Kong, as China’s annual national congress concluded its session with measures aimed at stimulating the slowing economy.
In the bond market, Treasury yields remained relatively stable after recent declines due to concerns about the U.S. economy. The yield on the 10-year Treasury rose to 4.24% from 4.22% late Monday. In January, it was approaching 4.80%.
A report released Tuesday morning indicated that U.S. employers were advertising 7.7 million job openings at the end of January, precisely matching economists’ expectations. This is another indication that the U.S. job market remains generally robust, at least for the time being, after the economy ended the previous year at a healthy rate.