Traders work on the floor of the New York Stock Exchange (NYSE) on March 11, 2025 in New York City.Spencer Platt/Getty Images
U.S. and Canadian stocks fell on Tuesday, but ended off their lows, after a volatile session that saw traders absorbing conflicting tariff updates and potential progress toward a ceasefire between Ukraine and Russia.
The S&P 500 index dropped as low as 5,528.41 points, briefly marking a 10% fall from its record closing high of 6,144.15 on Feb. 19, which is commonly known as a market correction. The S&P/TSX Composite Index closed at its lowest level since Oct. 31.
President Donald Trump said he would double tariffs set to take effect within hours on all imported Canadian steel and aluminum products to 50%.
The latest tariff threat added to investor unease that Trump’s trade policies, which include tariffs against Canada, Mexico and China, could trigger an economic slowdown or cause a recession. Tariff uncertainty has weighed on consumer sentiment, with company executives increasingly flagging the impact it can have on upcoming earnings. Citi Tuesday became the latest brokerage to revise its stance on U.S. stocks, downgrading its recommendation to “neutral.”
Stocks gained some traction after the U.S. agreed to resume military aid and intelligence sharing with Ukraine immediately after talks in Saudi Arabia in which Kyiv voiced readiness to accept a U.S. proposal for a 30-day ceasefire in its conflict with Russia.
Adding to the positive momentum, Ontario’s premier said he had agreed to suspend the Canadian province’s 25% surcharge on exports of electricity to Michigan, New York and Minnesota. And Trump later in the day said he would likely lower the 50% tariffs on aluminum and steel after Canadian officials agreed to talks.
“The market’s looking for something to get hopeful about after the last week or so, but we always say it’s hard to make changes based on something that might happen,” said Chris Fasciano, chief market strategist at Commonwealth Financial Network in Waltham, Massachusetts.
“So until you see an idea, whether it’s Russia, Ukraine, or whether you see what tariffs are finally going to be or what government spending is finally going to be, it’s hard to make wholesale changes in portfolios.”
On Monday, the S&P 500 recorded its most significant one-day drop since Dec. 18, wiping out just over US$1.3 trillion in market value, and a staggering US$4 trillion from its recent peak. The tech-heavy Nasdaq confirmed a 10% correction late last week.
The benchmark S&P 500 index is down more than 3.4% over the past two sessions, its largest drop since early August.
Global markets have been upended since Trump sparked back-and-forth tariff moves against major trading partners while recent economic data has indicated the U.S. economy may be softening. A reading on U.S. consumer prices on Wednesday will show if progress is being made on tamping down inflation. Domestically, the Bank of Canada is widely expected to cut interest rates by another 25 basis points.
The Dow Jones Industrial Average fell 478.23 points, or 1.14%, to 41,433.48, the S&P 500 lost 42.49 points, or 0.76%, to 5,572.07 and the Nasdaq Composite lost 32.23 points, or 0.18%, to 17,436.10.
Each of the 11 major S&P sectors was lower, although technology and consumer discretionary sectors, the two worst performing sectors on the year, saw the smallest declines.
The Canadian benchmark index ended down 132.51 points, or 0.5%, at 24,248.20.
The TSX consumer staples sector fell 2.8%, with shares of food retail company Empire Company Ltd down 3.4%.
Consumer discretionary was down 1.8%, industrials lost 1.4% and heavily weighted financials ended 1.4% lower.
Resource shares helped limit the TSX’s losses. The materials sector added 2.7% as gold and copper prices rallied.
Energy rose 0.7% as the price of oil settled 0.3% higher at US$66.25 a barrel.
Among U.S. stocks, Kohl’s forecast a bigger-than-expected drop in annual comparable sales, sending the retailer’s shares plummeting 24.1%.
Dick’s Sporting Goods dropped 5.7% after the retailer forecast downbeat annual results.
Delta Air Lines stumbled 7.3% after the carrier slashed its first-quarter profit estimates by half.
American Airlines slumped 8.3% after the carrier forecast a bigger-than-expected first-quarter loss. Weakness in the airlines helped send the Dow transportation index down 3.1%.
Oracle lost 3.1% after the cloud company missed quarterly revenue estimates.
In the bond market, Treasury yields clawed back some of their tumbles in recent months. The yield on the 10-year Treasury rose to 4.28% from 4.22% late Monday. In January, it was nearing 4.80%, before it began sinking on worries about the U.S. economy.
Declining issues outnumbered advancers for a 1.6-to-1 ratio on the NYSE and by a 1.1-to-1 ratio on the Nasdaq. The S&P 500 posted four new 52-week highs and 17 new lows, while the Nasdaq Composite recorded 22 new highs and 352 new lows. Volume on U.S. exchanges was 19.01 billion shares, compared with the 16.56 billion average for the full session over the last 20 trading days.
Reuters, Globe staff