U.S. stock markets fell on Tuesday, continuing one of the biggest selloffs in months. Investors were concerned about new tariffs that could hurt the global economy. There was a lot of ups and downs in trading because of mixed news about tariffs, but some hope came when Ukraine and Russia seemed closer to a ceasefire in their conflict.
The S&P 500 index dipped to 5,528.41 points, marking a 10% drop from its all-time high of 6,144.15 points reached on February 19, which is what we call a market correction. President Donald Trump announced he would double tariffs to 50% on all imported steel and aluminum from Canada, making investors even more nervous. People worried that Trump’s trade policies might lead to an economic slowdown or even a recession.
On Monday, the S&P 500 had its biggest drop in a day since December, losing over $1.3 trillion in market value and around $4 trillion since reaching its peak. The tech-heavy Nasdaq also fell into a 10% correction late last week. Over the past two days, the S&P 500 dropped more than 3.4%, the largest drop since early August.
According to Ken Polcari, a market expert, this situation creates worry in the market, leading to quick reactions from investors. There was a bit of recovery when the U.S. decided to continue military aid and support for Ukraine after positive talks with the country about a ceasefire with Russia.
Additionally, the Premier of Ontario announced he would temporarily lift a tax on electricity exports to several U.S. states, which also helped boost sentiment. Chris Fasciano, another market strategist, explained that it’s hard for investors to make big changes unless they see clear ideas about tariffs or government spending.
The Dow Jones Industrial Average dropped 478.23 points, or 1.14%, closing at 41,433.48. The S&P 500 lost 42.49 points, or 0.76%, ending at 5,572.07. The Nasdaq Composite fell by 32.23 points, or 0.18%, to 17,436.10.
The ongoing trade conflicts started by Trump have caused turmoil in global markets, and new data shows the economy might be slowing down. A report on consumer prices is expected on Wednesday to check on inflation. Meanwhile, a report showed more job openings in January.
All major S&P sectors ended lower, with technology and consumer goods experiencing smaller losses. The uncertainty from tariffs has affected consumer confidence, and many companies have warned that earnings may drop. Kohl’s warned of a bigger-than-expected sales drop, causing its stock to plummet by 24.1%. Dick’s Sporting Goods shares fell by 5.7% after it announced weak results, while Delta Air Lines dropped 7.3% after cutting its profit estimates, and American Airlines fell 8.3% due to expected losses.
These declines in airline stocks pushed the Dow transportation index down by 3.1%. Oracle shares also dropped by 3.1% after it missed revenue expectations. Citi, a financial firm, has downgraded its outlook on U.S. stocks to neutral. On the NYSE, more stocks fell than rose by a ratio of 1.6-to-1, and on the Nasdaq, the ratio was 1.1-to-1. The S&P 500 saw four new 52-week highs and 17 new lows, while the Nasdaq recorded 22 new highs and 352 new lows. Total trading volume was 19.01 billion shares, which is higher than the average of 16.56 billion shares in the past 20 trading days
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