Wall Street Sell-Off Deepens as Trump Escalates Trade War With Canada Tariffs

By mid-morning Tuesday, with the Dow Jones Industrial Average down 529 points, or 1.3%, as of 10:50 a.m. Eastern time, Wall Street was sliding again. The S&P 500 was off 0.9% in morning trading, and the Nasdaq composite was 0.6% lower. That left the broad market more than 9% below the record it set only a month earlier.

The trigger was a new move in the trade war. President Donald Trump said he would raise tariffs on steel and aluminum coming from Canada, doubling the planned increase to 50%. He described it as a direct response to steps Canada took after he had earlier threatened tariffs on one of the country's most important business partners.

The day extended a sell-off that has been a rough ride for investors. The S&P 500 has moved by at least 1%, up or down, in seven of the last eight days. Behind the swings is worry about how much economic pain Trump is willing to let the country absorb as he pushes tariffs and other policies meant to remake the country and the world.

Other warning signals have piled up too. Trump's on-again, off-again rollout of tariffs has created confusion and pessimism among U.S. households and businesses. The fear is that the whipsaw moves will either hurt the economy directly or generate enough uncertainty to push companies and consumers into a kind of paralysis, freezing spending altogether.

Delta Air Lines offered a concrete example late Monday. The airline said it is already seeing a change in confidence that is weighing on demand for close-in bookings. It roughly halved its forecast for revenue growth in the first three months of 2025, to a range of 3% to 4% from 7% to 9%. Its stock lost 8.4%. Southwest Airlines also cut its forecast for an important underlying revenue trend, pointing to reasons that include reduced government travel. Its shares nonetheless rose 6.4%, after it said it would soon start charging some passengers to check bags and announced changes meant to encourage its most loyal customers. Oracle fell 5.9% after reporting quarterly profit and revenue that fell short of analysts' expectations.

Earlier in the morning, several Big Tech stocks had given the market some support after months of heavy losses. Tesla initially rose after Trump said he would buy a Tesla in a show of support for what he called "Elon's 'baby.'" He said political opponents were "trying to illegally and collusively boycott Tesla," as Elon Musk leads efforts in Washington to cut federal spending. The gain did not last. Tesla flipped to a loss of 1.1%, bringing its decline for the year to 45.6%. Nvidia also surrendered earlier gains, falling 0.8% and putting its loss for the year at 21%. The sell-off has hit especially hard at stocks seen as having grown too expensive amid Wall Street's frenzy over artificial intelligence.

Abroad, indexes were mostly lower across Europe and Asia. Shanghai stocks rose 0.4% and Hong Kong was nearly unchanged as China's annual national congress wrapped up its session with some measures to help boost its slowing economy.

In the bond market, Treasury yields were steadier after tumbling in recent months on worries about the U.S. economy. The 10-year Treasury yield slipped to 4.21% from 4.22% late Monday. In January, it had been nearing 4.80%. What investors are watching now is whether the erratic tariff rollout does direct damage or simply stalls spending through uncertainty.