Major United States benchmark averages extended declines on Tuesday (Wednesday AEDT) as U.S. President Donald Trump’s escalating trade war rattled risk sentiment.
The Dow Jones Industrial Average fell 670.3 points or 1.6% to 42,521, closing at seven-week lows. The S&P 500 fell 71.6 points or 1.2% to 5,778.1, touching 17-week lows during intraday trade, while the Nasdaq Composite slipped 65 points or 0.4% to 18,285.2.
The market turmoil followed Trump’s imposition of 25% tariffs on Canada and Mexico, effective at midnight, alongside an additional 10% duty on Chinese imports.
In retaliation, China announced tariffs of up to 15% on select U.S. goods, while Mexican President Claudia Sheinbaum signalled retaliatory measures to be revealed later this week.
Canadian Prime Minister Justin Trudeau also introduced a 25% tariff on U.S. products, prompting Trump to threaten further levies.
Meanwhile, shares of Target slumped 3% in New York trading following its earnings release. The retailer now expects little to no sales growth this year, adding to investor concerns.
Target CEO Brian Cornell noted in a CNBC interview that shoppers should expect to see price hikes in stores “over the next couple of days” following the tariff implementation.
Best Buy also flagged potential price increases, warning investors that tariffs would likely push up the cost of gadgets and appliances.
Target and Best Buy now join Walmart and Home Depot in adopting a cautious outlook, even after reporting solid fourth-quarter results.
On the bond market, the 10-year Treasury yield rose 1.2% to 4.208%, while the 2-year yield slipped 0.4% to 3.941%.
