U.S. stocks sank again on Tuesday, marking the market’s worst day of the year. The Dow Jones Industrial Average plummeted nearly 500 points in morning trading, following the worst day for the markets this year. President Trump recently announced an additional 25% tariff on steel and aluminum from Canada, raising the tax to 50% overall.
Despite briefly reversing the increase after intervention from Ontario’s Premier Doug Ford, Trump clarified that a 25% tariff on steel and aluminum imports would still go into effect at midnight. The Dow fell another 478 points, or 1.1%, on Tuesday. The S&P 500 dropped nearly 0.8%, and the Nasdaq declined almost 0.2%.
Investors and economists are increasingly worried about the tariffs’ impact on the U.S. economy, fearing they could spark a recession. A finance professor at Tulane University says, “In some ways, it’s a self-fulfilling prophecy. If you think a recession is coming, then you stop capital expenditures, you don’t hire as many people, and you work yourself into a recession.”
Trump appears committed to his new tariffs despite mounting concerns.
In a Fox News interview aired Sunday, he downplayed the possibility of a recession, suggesting instead that investors should expect “a period of transition” for the economy.
Dow drops amid tariff concerns
“We’re bringing wealth back to America.
That’s a big thing. And there are always periods where it takes a little time,” Trump told Fox News. By the end of Monday, the U.S. market had erased all gains since Trump’s November election win.
The White House continued to downplay Wall Street’s concerns. “President Trump delivered historic job, wage, and investment growth in his first term, and is set to do so again in his second term,” White House spokesperson Kush Desai said Monday. Economic uncertainty is beginning to affect some of the largest U.S. companies.
Retailers are warning that Trump’s new tariffs will increase their costs and those of consumers. Delta Air Lines, American Airlines, and Southwest have all cut their forecasts, citing reduced consumer and corporate confidence caused by increased macro uncertainty. CEOs from major companies will have the opportunity to address their concerns about tariffs directly with Trump on Tuesday afternoon at the Business Roundtable, an influential organization representing the country’s largest companies.
