The U.S. stock market continued its downward spiral on Tuesday, rattled by renewed trade war tensions. President Donald Trump’s latest tariff hikes sent shockwaves through Wall Street, dragging the major indexes further into correction territory. The stock market sell-off has now wiped out over 9% from the S&P 500’s recent record highs, raising concerns about broader economic instability.
Wall Street Slides as Trump Doubles Down on Tariffs
The S&P 500 fell 0.9% in early trading after Trump announced a sharp increase in tariffs on steel and aluminum imports from Canada, doubling the planned hike to 50%. The move was a direct response to Canada’s retaliatory measures following previous tariff threats.
The Dow Jones Industrial Average plunged 529 points, or 1.3%, by mid-morning, while the Nasdaq Composite dropped 0.6%. Market volatility remains high, with the S&P 500 experiencing daily swings of at least 1% in seven of the last eight trading sessions.
Investor Uncertainty Weighs on Markets
Investors are growing increasingly anxious over the impact of Trump’s aggressive trade policies. The uncertainty surrounding tariffs and other economic measures has created a climate of fear, leading businesses and consumers to cut back on spending and investment.
Delta Air Lines (NYSE:DAL) signaled a shift in consumer confidence, revealing that weakening demand for last-minute bookings had forced the airline to slash its revenue growth forecast for Q1 2025. The company now expects revenue to rise only 3% to 4%, a steep decline from its previous 7% to 9% estimate. Delta’s stock plunged 8.4% on the news.
Southwest Airlines (NYSE:LUV) also lowered its revenue guidance, citing reduced government travel and softer demand. However, its stock rebounded 6.4% after announcing plans to introduce baggage fees and implement loyalty program changes.
Big Tech Struggles Amid Stock Market Downturn
The stock market sell-off has taken a toll on Big Tech stocks, which had been market leaders for years. Oracle (NYSE:ORCL) fell 5.9% after missing earnings and revenue expectations.
Tesla (NASDAQ:TSLA) saw early gains after Trump publicly voiced support for the company, claiming that political opponents were attempting to “illegally and collusively boycott” the automaker. However, Tesla shares reversed course, dropping 1.1% and extending its year-to-date loss to 45.6%.
Nvidia (NASDAQ:NVDA), a key player in the artificial intelligence boom, shed 0.8%, pushing its year-to-date decline to 21%. The sell-off in high-growth tech stocks has been exacerbated by concerns over rising valuations and shifting investor sentiment.
Global Markets React to Wall Street’s Decline
Stock markets across Europe and Asia mostly followed Wall Street’s downward trend. However, China’s Shanghai Composite Index managed a modest 0.4% gain after Beijing announced measures to stimulate economic growth. Hong Kong’s Hang Seng Index remained flat.
Meanwhile, the bond market remained relatively stable, with the 10-year U.S. Treasury yield edging down to 4.21% from 4.22% the previous day. Yields had been as high as 4.80% in January, reflecting investors’ flight to safety amid economic uncertainty.
Outlook: More Turbulence Ahead?
As the stock market sell-off deepens, analysts warn of further volatility ahead. With trade tensions escalating, corporate earnings under pressure, and consumer sentiment wavering, investors should brace for continued market turbulence. Traders will be closely watching upcoming economic data and any policy shifts from the Federal Reserve for signs of stability.
For now, Wall Street remains on edge, waiting to see whether the economy can weather the storm or if deeper losses are yet to come.
Outlook: More Turbulence Ahead?
As the stock market sell-off deepens, analysts warn of further volatility ahead. With trade tensions escalating, corporate earnings under pressure, and consumer sentiment wavering, investors should brace for continued market turbulence. Traders will be closely watching upcoming economic data and any policy shifts from the Federal Reserve for signs of stability.
For now, Wall Street remains on edge, waiting to see whether the economy can weather the storm or if deeper losses are yet to come. Investors should consider diversifying their portfolios and staying informed about market developments. Sectors like energy and consumer staples may offer more resilience during downturns, providing some stability amid ongoing uncertainty.
Featured Image – Freepik
