NEW YORK (AP) — The U.S. stock market is falling further Tuesday following President Donald Trump’s latest escalation in his trade war, briefly pulling Wall Street 10% below its record set just a few weeks ago.
The S&P 500 was down 0.6% in afternoon trading after Trump said he would double planned tariff increases on steel and aluminum coming from Canada. The president said it was a response to moves a Canadian province made after Trump began threatening tariffs on one of the United States' most important trading partners.
The Dow Jones Industrial Average was down 462 points, or 1.1%, as of 2:10 p.m. Eastern time. While most stocks on Wall Street were falling, gains for Tesla and a handful of other highly influential stocks were muting the effect, and the Nasdaq composite was flat.
The S&P 500 was at the edge of what Wall Street calls a “correction," where it falls 10%, and was sitting within 0.9 percentage points of the mark. It had earlier sunk as much as 1.5% during the day after erasing an initial, modest gain.
Such head-spinning moves are becoming routine following a scary ride for investors where the S&P 500 has swung by at least 1%, up or down, seven times in the last eight days. The heaves back and forth are a result of Wall Street's uncertainty about how much pain Trump is willing for the economy to endure through tariffs and other policies in order to remake the country and world in Trump's fashion.
Trump has acknowledged the economy could feel some “disturbance” because of the tariffs. Asked on Tuesday just how much pain Trump would be willing for the economy and stock market to take, White House press secretary Karoline Leavitt declined to give an exact answer. But she said earlier in a press briefing that “the president will look out for Wall Street and for Main Street.”
For his part, Trump said earlier on social media, “The only thing that makes sense is for Canada to become our cherished Fifty First State. This would make all Tariffs, and everything else, totally disappear.”
Tuesday's drops for the stock market also followed more warning signals flashing about the economy as Trump’s on -and- off -again rollout of tariffs creates confusion and pessimism for U.S. households and businesses.
Such tariffs can hurt the economy directly by raising prices for U.S. consumers and gumming up global trade. But even if they end up being milder than feared, all the whipsaw moves could create so much uncertainty that U.S. companies and consumers freeze, which would sap energy from the economy.
Delta Air Lines said late Monday that it’s already seeing a change in confidence among customers, which is affecting demand for close-in bookings for its flights. That pushed the airline to roughly halve its forecast for revenue growth in the first three months of 2025, down to a range of 3% to 4% from a range of 7% to 9%.
Delta’s stock lost 8.3%.
Southwest Airlines also cut its forecast for an important underlying revenue trend, and it pointed specifically to less government travel, among other reasons, including wildfires in California and “softness in bookings and demand trends as the macro environment has weakened.”
Its stock nevertheless rallied 8.5%, though, after the airline said it would soon begin charging some passengers to check bags and announced changes to encourage its most loyal customers.
Oracle dropped 5% after the technology giant reported profit and revenue for the latest quarter that fell short of analysts’ expectations.
Helping to keep the market's losses in check were several Big Tech stocks, which steadied a bit after getting walloped in recent months. Elon Musk’s Tesla rose 4.8%, for example, after Trump said he would buy a Tesla in a show of support for “Elon’s ‘baby.’”
Tesla's sales and brand have been under pressure as Musk has led efforts in Washington to cut spending by the federal government. Tesla's stock is down 42.3% for the young year so far.
Other Big Tech superstars, which had led the market to record after record in recent years, also held a bit firmer. Nvidia added 2.9% to trim its loss for the year so far to 18%. It’s struggled as the market’s sell-off has particularly hit stocks seen as getting too expensive in Wall Street’s frenzy around artificial-intelligence technology.
In stock markets abroad, which have mostly been beating the United States so far this year, indexes fell across much of Europe and Asia.
Stocks rose 0.4% in Shanghai and were nearly unchanged in Hong Kong as China’s annual national congress wrapped up its annual session with some measures to help boost the slowing economy.
In the bond market, Treasury yields held a bit steadier after tumbling in recent months on worries about the U.S. economy. The yield on the 10-year Treasury rose to 4.26% from 4.22% late Monday. In January, it was nearing 4.80%.
A report released Tuesday morning showed that U.S. employers were advertising 7.7 million job openings at the end of January, exactly as economists expected. It's the latest signal that the U.S. job market remains relatively solid overall, for now at least, after the economy closed last year running at a healthy pace. ___
AP Business Writers Yuri Kageyama and Matt Ott contributed.
Stan Choe, The Associated Press
