US Stock Market Down Today After Trump's New Tariffs

• Increased tariffs impact global markets
• Canadian auto industry under threat
• Focus on inflation after labor market data

Stocks experienced an emotional rollercoaster Tuesday morning as they attempted to recover from Monday’s steep tech selloff. However, any signs of improvement quickly dissipated in the afternoon. The market’s turnaround came after President Trump announced an increase in tariffs on steel and aluminum imported from Canada, now set at 50%.

The US president didn’t stop there, also threatening to “substantially increase” tariffs on vehicles imported from Canada. Trump noted in a post on Truth Social that these measures “will essentially permanently shut down the Canadian auto industry. These cars can easily be made in the US!”

The repercussions were immediate for stock indexes, with the tech-heavy Nasdaq Composite (^IXIC) falling about 0,4%. At the same time, the SP 500 (^GSPC) and Dow Jones Industrial Average (^DJI) posted declines of about 0,9% and 1,3%, respectively. The Dow was particularly affected by the decline in Verizon (VZ) shares, which plunged about 7%, pushing the index deeper into correction territory.

At the time of publication, the price of Bitcoin was quoted at US$81.176,22, up 3% in the last 24 hours.

Those swings follow Monday's devastating selloff that resulted in a 4% daily loss for the Nasdaq, its worst since 2022. There was one positive note, however, as Tesla (TSLA) shares saw a brief reprieve after an explicit endorsement from Trump.

The mood on Wall Street is becoming increasingly fraught with concern, with investors weighing the risk of stagflation. This scenario is fueled by deep cuts in companies’ economic projections and a shift in market perceptions about future growth.

On the economic front, Tuesday's labor market figures were largely in line with market expectations, setting the stage for upcoming inflation reports. February's Consumer Price Index (CPI) is due out on Wednesday, and the Producer Price Index (PPI) for the same month is due out on Thursday.