Stocks plunge, contributing to the most significant selloff in months on economic worries

U.S. equities plummeted on Tuesday, contributing to the most significant selloff in months, as investors were concerned about the impact of the fresh tariff threats on the global economy. Trading was choppy due to contradictory tariff information, although progress toward a truce between Ukraine and Russia momentarily buoyed equities.

The S&P 500 index opened a new tab and fell as low as 5,528.41 points, representing a 10% loss from its record closing high of 6,144.15 on February 19, often known as a market correction. President Donald Trump announced he would raise tariffs on all imported Canadian steel and aluminum products, which were about to go into force in hours, to 50%.

The new tariff threat heightened investor concerns that Trump’s trade policies, which include tariffs on Canada, Mexico, and China, might create an economic slowdown or a recession. On Monday, the S&P 500 had its worst one-day plunge since December 18, wiping away just over $1.3 trillion in market value and a whopping $4 trillion from its previous high. Late last week, the Nasdaq, which is heavily focused on technology, confirmed a 10% fall.

The benchmark S&P index has fallen more than 3.4% in the last two days, its worst decline since early August. “That creates just angst and nervousness in the market, so you’re going to continue to get the shoot first, ask questions later’ type of response, which is precisely what you’re getting,” said Ken Polcari, chief market strategist at SlateStone Wealth in Jupiter, Florida.

Stocks rose as the United States promised to begin military aid and information sharing with Ukraine immediately following discussions in Saudi Arabia. According to a joint statement, Kyiv expressed willingness to accept a US plan for a 30-day truce in its war with Russia.

Adding to the good mood, Ontario’s leader said that the Canadian province has decided to suspend its 25% tax on power exports to Michigan, New York, and Minnesota. “And so until you see a concept, whether it’s Russia, Ukraine, or whether you see what tariffs will ultimately come to be or what government spending is finally going to be, it’s hard to make wholesale modifications to portfolios.”

The Dow Jones Industrial Average (.DJIA) slid 478.23 points, or 1.14%, to 41,433.48, while the S&P 500 (.SPX) sank 42.49 points, or 0.76%, to 5,572.07 and the Nasdaq Composite (.IXIC) fell 32.23 points, or 0.18%, to 17,436.10. Global markets have been rocked since Trump launched back-and-forth tariff actions against key trading partners, and recent economic data suggests the economy may be slowing. A Wednesday’s consumer price measurement will reveal if progress is being made in lowering inflation.