Stocks sink as Trump places more tariffs on Canada

U.S. stocks extended losses on Tuesday after President Donald Trump said he will place more tariffs on steel and aluminum entering the U.S. from Canada.

The Dow Jones Industrial Average was down more than 500 points, or about 1.2%, while the Nasdaq Composite and S&P 500 fell 0.8% and 1%, respectively.

Trump announced in a Truth Social post on Tuesday that the U.S. will impose an additional 25% levy on steel and aluminum imports from Canada, bringing the total to 50%. He said they will go into effect on March 12.

The president also warned in the post that he will “substantially” increase tariffs on autos entering the U.S. from Canada on April 2 if “other egregious, long time tariffs” are not dropped by Canada.

The losses follow Monday’s sell-off that was triggered by concerns about the effects of Trump’s tariffs on economic growth, which spooking investors. The Dow fell 890.01 points, or 2.08%, while the Nasdaq Composite and S&P 500 slid 4% and 2.69%, respectively. The Dow and the S&P 500 saw their worst day since Dec. 18; the tech-heavy Nasdaq had its worst day since September 2022.

STOCKS TUMBLE ON RECESSION FEARS, TRUMP TARIFF UNCERTAINTY

On Sunday, Trump declined to explicitly rule out a full-blown recession for the U.S. economy this year, telling Maria Bartiromo in a “Sunday Morning Futures” exclusive interview that the country will see a “period of transition” as his policies take effect.

“I hate to predict things like that,” he said of a recession. “There is a period of transition because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing… it takes a little time, but I think it should be great for us.”

Financial markets have been volatile in recent weeks as rising trade tensions and signs of slowing U.S. economic growth weighed on consumer confidence and business activity. Investors are grappling with a barrage of new policies from the new Trump administration, particularly in trade, where back and forth on tariff policy has increased uncertainty for businesses, consumers and investors.

TRUMP SAYS US WILL EXPERIENCE ‘PERIOD OF TRANSITION’ WHEN ASKED IF ECONOMY COULD SEE A RECESSION THIS YEAR

“Many people have been worried about elevated valuations among U.S. equities for some time and looking for the catalyst for a market correction,” Dan Coatsworth, an investment analyst at AJ Bell, said on Monday. “A combination of concerns about a trade war, geopolitical tensions and an uncertain economic outlook could be that catalyst.”

Tech shares bore the brunt of the recent selloff on Wall Street, with Tesla shares in particular tumbling more than 15% on Monday.

Tesla’s stock is down 41.4% year to date, including a decline of more than 36.6% in the past month. Since Tesla reached its all-time largest market capitalization of $1.5 trillion on Dec. 17, its stock has fallen by more than half to a new market cap of $696 billion as of March 10.

TESLA SHARES SLIDE AMID MARKET SELL-OFF ON RECESSION WORRIES, TARIFF UNCERTAINTY

UBS cut its forecast for first-quarter deliveries, which contributed to the sell-off, along with broader concerns about the U.S. economy facing a recession and a widening trade war amid Trump’s tariff threats.

“The narrative changes on a daily basis around tariffs – that’s what causing all this uncertainty,” said Art Hogan, chief market strategist at B Riley Wealth, said on Monday. “The damage around markets that has everything to do with sentiment is reflected more in the Nasdaq, because technology stocks are certainly more influenced by risk sentiment.”

Shares of the other Magnificent Seven stocks – Apple, Microsoft, Alphabet, Amazon, Nvidia and Meta Platforms, fell between 2.4% and 5.1% on Monday.

FOX Business’ Taylor Penley, Eric Revell and Reuters contributed to this report.