Wall Street Extends Losses Amid Trade War Concerns

Wall Street’s main indexes were set to extend recent losses on Tuesday, as investors avoided riskier assets due to fears that President Donald Trump’s tariffs could escalate into a global trade war.

At 8:15 a.m. ET:

Dow E-minis were down 161 points, or 0.37%
S&P 500 E-minis were down 42 points, or 0.72%
Nasdaq 100 E-minis were down 175 points, or 0.85%

The CBOE market volatility index edged up 1.48 points after reaching a two-month high at 24.31 in the previous session.

Impact of Tariffs on Markets

The benchmark S&P 500 logged its largest single-day drop since mid-December. The Nasdaq closed lower by about 9% from its all-time high after the U.S. imposed tariffs on imports from Mexico and Canada while doubling duties on Chinese goods. This standoff threatens nearly $2.2 trillion in annual trade.

In response, China imposed additional tariffs on U.S. imports, while Canada vowed retaliatory measures.

Sector and Stock Performance

Automotive Industry: Ford and General Motors, which have extensive supply chains across North America, fell about 1.3% each in premarket trading.
Tech Giants: Nvidia, Microsoft, and Meta declined between 1.6% and 3%.
Medical Equipment: Illumina dropped 4% after China banned imports of its genetic sequencers following the tariff announcement.
Chinese Companies: U.S.-listed shares of Bilibili and JD.com rebounded, rising 3.5% and 2%, respectively.

Economic Outlook and Federal Reserve Response

“There are concerns that tariffs will put pressure on the economy and markets overall,” said Larry Tentarelli, chief technical strategist at Blue Chip Daily Trend Report.

Sectors expected to be most affected include:

Industrial sector due to its cyclical nature
Small-cap stocks
High-valuation tech stocks

Investors anticipate that the new tariffs will fuel inflation, weaken demand, and reduce corporate profits. Futures tracking the Russell 2000 small-cap index dropped 1%.

Morgan Stanley estimates that tariffs on imports from Mexico, Canada, and China through 2026 could lower S&P 500 earnings by 5% to 7%. Executives are also delaying investments and expenditures as they await further clarity on upcoming trade policies, expected to be announced on April 1.

Federal Reserve and Monetary Policy

Interest rate futures indicate that the Federal Reserve is likely to implement at least three 25-basis-point interest rate cuts by December, up from two expected on Monday. Investors are betting that slowing economic growth will prompt the central bank to lower borrowing costs.

New York Fed President John Williams’ comments later in the day will be closely analyzed for insights into the central bank’s monetary policy stance.

Safe-Haven Assets Gain

Gold prices rose as investors sought safe-haven assets, boosting shares of bullion miners such as Sibanye Stillwater and Gold Fields by about 2% each.

Company-Specific Developments

Tesla: Shares fell 3.3% after reports showed that sales of its China-made electric vehicles dropped by 49.2% in February.
Target: Shares declined 1.8% after the retailer forecast full-year comparable sales below estimates.

“Wall Street Extends Losses Amid Trade War Concerns” “Wall Street Extends Losses Amid Trade War Concerns” “Wall Street Extends Losses Amid Trade War Concerns” “Wall Street Extends Losses Amid Trade War Concerns”