US stock market today- Market plunge as Dow Jones falls 427 points, S&P 500 and Nasdaq react to economic slowdown fears; amid Trump’s tariffs on Canadian steel and aluminum

US stock market is on a sharp decline as President Trump announced new additional tariffs on Canadian steel and aluminum. The Dow Jones Industrial Average fell by 427 points, posing a 0.1% decline. The S&P 500 slid 0.6%, while the Nasdaq Composite lost 0.1%.

President Trump said that steel and aluminum tariffs on Canada would double to 50% from 25%. This move reignited fears of a US economic downturn as the input cost will increase for the US industries.

Is the Nasdaq officially in correction territory?

Nasdaq Composite plunged more than 10% from its record high set in late 2024. The S&P 500 is also down nearly 9% from its February peak. Monday saw the Nasdaq’s worst day since September 2022, with a 4% decline. Meanwhile, the Dow lost almost 900 points, slipping below its 200-day moving average for the first time since November 1, 2023.

Citigroup responded to this sell-off by downgrading US stocks from “overweight” to “neutral,” citing concerns over economic stability.

What impact does Delta Airlines’ outlook have on market sentiment?

Delta Air Lines further fueled economic worries by slashing its earnings forecast, citing weak US demand. Its stock fell over 8% after this revision. Investors now fear that a broader economic slowdown could be on the horizon, with major companies showing signs of financial strain.

Ross Mayfield, an investment strategist at Baird, commented, “There’s clearly a tolerance for pain on the part of the administration in pursuit of trade goals that are not necessarily entirely economic in nature.” He added that while a recession isn’t imminent, the economy may face a slowdown.

What did Trump say about a potential recession?

In a recent Fox News interview, Trump referred to the current economic turbulence as a “period of transition.” His comments followed Treasury Secretary Scott Bessent’s remarks on CNBC, where he warned of a possible “detox period” as the administration cuts federal spending.

How will inflation data impact the Federal Reserve’s next move?

Investors are closely watching February’s Consumer Price Index (CPI) and Producer Price Index (PPI) reports, due on Wednesday and Thursday. These indicators will provide crucial insights into inflation trends and influence the Federal Reserve’s monetary policy decisions.

Mayfield stated, “It’ll be really important that we don’t see an upside surprise on CPI. The Fed has room to cut rates if the economy slows, but they can only act if inflation is under control.”

Which stocks hit new lows and highs?

On Tuesday, 14 S&P 500 stocks hit new 52-week lows, including:

• T. Rowe Price Group (lowest since Nov 2023)
• Align Technology (lowest since Apr 2020)
• Applied Materials (lowest since Dec 2023)
• Advanced Micro Devices (AMD) (lowest since Oct 2023)
• ON Semiconductor (lowest since Aug 2021)
• Teradyne (lowest since Nov 2023)
• Host Hotels (lowest since Oct 2023)
• CSX (lowest since Nov 2023)
• Hubbell (lowest since Jan 2024)

Meanwhile, only four stocks reached new highs:

• CME Group
• Bristol-Myers
• Cencora
• CenterPoint Energy

How did Tesla defy the market downturn?

Despite the sell-off, Tesla gained over 1%, breaking a three-day losing streak. This came after a positive analyst note from Morgan Stanley and a supportive social media post from Trump.

FAQs:

Why did the US stock market drop sharply today?
The market reacted to Trump’s tariffs on Canadian imports, sparking fears of an economic slowdown.

How did major indices perform amid Trump’s new tariffs?
The Dow Jones fell 427 points, S&P 500 dropped 0.6%, and Nasdaq Composite declined 0.1%.