Wall Street reeled after President Trump’s tariffs went into effect Tuesday, with the Dow Jones Industrial Average plunging nearly 800 points, around 1.9%, at 11 a.m. ET — wiping out all of the blue-chip index’s gains since the election.
The broad-based S&P 500 and tech-heavy Nasdaq also suffered declines of nearly 2% as all three major indexes extended Monday’s losses.
Canada and Mexico were hit with 25% tariffs, while China’s duties were doubled to 20%.
Automakers like General Motors and Tesla, heavily exposed to trade tensions, saw sharper declines, while Best Buy also tumbled after reporting earnings.
Gold prices surged as investors sought safe-haven assets, and the CBOE Volatility Index (VIX), often called Wall Street’s “fear gauge,” climbed higher, reflecting mounting uncertainty.
Treasury yields, however, held steady, with the 10-year yield remaining at 4.178%, the lowest level this year.
Canada quickly responded with a 25% tariff on nearly $100 billion worth of US imports, while Mexico’s president announced that the country’s retaliation would be detailed on Sunday.
China wasted no time in responding either. Beijing imposed fresh tariffs on US agricultural products, targeting key exports like cotton, corn, soybeans and wheat, sending commodity prices lower.
Additionally, China banned U.S. biotech firm Illumina from exporting gene sequencers, dragging its shares down more than 2%.
The Chinese government also filed a formal complaint with the World Trade Organization.
Economists warn that the cost of tariffs will likely be passed down to American consumers, raising prices on everything from groceries to automobiles.
While some traders remain hopeful that negotiations will de-escalate the trade war, markets are bracing for continued volatility as global tensions rise.
