US close: Uncertainty rattles markets as hectic tariff campaign continues

(Sharecast News) - A step-up in protectionist threats between Canada and the US prompted another negative session on Wall Street on Tuesday, with all three benchmark indices hitting six-month lows.

Also weighing on sentiment was a small business confidence survey which fell to a four-month low, and Citi's downgrade of US equities to 'neutral'.

The Dow slumped 1.1% to 41,433.48 with just four constituents in positive territory, while the S&P 500 fell 0.8% to 5,572.07 and the Nasdaq slipped 0.2% to 17,436.10. All three benchmarks were trading at levels not seen since early-September.

That followed a mass sell-off on Monday, which saw the Dow, S&P 500 and Nasdaq drop 2.1%, 2.7% and 4.0%, respectively, after Donald Trump refused to rule out a recession this year due to the economic impact of his hectic tariff campaign.

Tuesday's selling pressure came after yet more political seesawing as Trump threatened to double tariffs on Canadian steel and aluminium to 50%. The surprise move was in retaliation for Ontario adding a 25% surcharge on electricity it sends to US states - which itself was a response to the initial tariffs.

Ontario Premier Doug Ford then quickly suspended its surcharge after US officials agreed to talks in Washington later this week. In a joint statement Ford and US Commerce Secretary Howard Lutnick said they had a "productive conversation" "on Tuesday.

"This is Trump 2.0 and he's made it clear he will wield this tariff tool until he gets what he wants from his opponents. However, investors have been left scratching their heads about exactly what that really is," said Danni Hewson, head of financial analysis at AJ Bell.

In economic news, the NFIB's Small Business Optimism Index fell to 100.7 in February, from 102.8 in January, missing the 101.0 consensus forecast. The uncertainty sub-index rose 4 points over the month to its second-highest recorded level of 104, with just a net 12% of owners saying it was a good time to expand their business.

Meanwhile, January's JOLTS report revealed job openings had increased by 232,000 to 7.74m, according to the Bureau of Labor Statistics, up from a revised reading of 7.51m in December and ahead of market expectations of 7.63m.

In other news, Citi downgraded its stance on US equities on Tuesday to 'neutral' from 'overweight' as it made changes to equities and credit in its global asset allocation, in line with its view "that US exceptionalism is at least pausing".

Market movers

Airline and travel stocks were on the descent on Tuesday after Delta became the latest carrier to slash financial forecasts, cutting growth guidance for the first quarter by around a half. The Atlanta-based airline now expects revenues in the three months to 31 March to be between $13.9bn and $14.1bn, representing 3-4% growth from last year's $13.7bn. Earlier guidance from the company pointed to growth of between 7% and 9%.

American Airlines and United Airlines both dropped, along with travel tech platforms Expedia and Booking Holdings. However, Southwest outperformed with shares up 8% after announcing that it would end its "Bags Fly Free" promise to customers for the first time.

Ford and General Motors were in reverse after Trump's threat to retaliate with fresh taxes on autos in his latest spate with Canada. "Ontario is home to vast swathes of auto manufacturing hubs, part of a complex supply chain that zig zags across borders," explained Hewson from AJ Bell.

Also lower was Dick's Sporting Goods despite posting bumper holiday sales, as the retailer forecast full-year earnings below Wall Street estimates on concerns about the health of the US economy mount.

However, it was Kohl's that was the heaviest faller of the day, dropping 24% after the department store chain posted a slide in fourth-quarter sales and warned of another difficult year ahead.

Dow Jones - Risers

Boeing Co. (BA) $154.06 3.99%

Salesforce.Com Inc. (CRM) $277.05 1.52%

Unitedhealth Group Inc. (UNH) $486.04 1.21%

Microsoft Corp. (MSFT) $380.45 0.08%

Dow Jones - Fallers

Verizon Communications Inc. (VZ) $43.47 -6.58%

Walt Disney Co. (DIS) $97.90 -5.03%

McDonald's Corp. (MCD) $306.84 -3.31%

International Business Machines Corporation (CDI) (IBM) $248.95 -3.09%

Apple Inc. (AAPL) $220.84 -2.92%

Nike Inc. (NKE) $74.17 -2.92%

Visa Inc. (V) $331.84 -2.74%

Amgen Inc. (AMGN) $318.89 -2.59%

American Express Co. (AXP) $255.39 -2.27%

Cisco Systems Inc. (CSCO) $60.67 -2.24%

S&P 500 - Risers

Southwest Airlines Co. (LUV) $30.53 8.34%

Brighthouse Financial, Inc. (BHF) $53.34 5.67%

NRG Energy Inc. (NRG) $88.53 4.48%

Freeport-McMoRan Inc (FCX) $35.87 4.00%

Boeing Co. (BA) $154.06 3.99%

Quanta Services Inc. (PWR) $246.41 3.94%

Fluor Corp. (FLR) $35.55 3.82%

Affiliated Mgrs Group (AMG) $160.22 3.60%

Netflix Inc. (NFLX) $895.10 3.28%

Western Digital Corp. (WDC) $41.80 3.11%

S&P 500 - Fallers

Kohls Corp. (KSS) $9.15 -24.07%

American Airlines Group (AAL) $11.46 -8.32%

Expedia Group Inc. (EXPE) $163.75 -7.28%

Delta Airlines Inc. (DAL) $46.68 -7.25%

Jack Henry & Associates Inc. (JKHY) $176.69 -7.08%

Verizon Communications Inc. (VZ) $43.47 -6.58%

Tractor Supply Company (TSCO) $53.92 -5.75%

Foot Locker Inc. (FL) $16.22 -5.53%

Travel + Leisure Co (TNL) $48.20 -5.53%

Coty Inc. Class A (COTY) $5.68 -5.48%

Nasdaq 100 - Risers

Tesla Inc (TSLA) $230.58 3.79%

Netflix Inc. (NFLX) $895.10 3.28%

Western Digital Corp. (WDC) $41.80 3.11%

Broadcom Inc. (AVGO) $190.09 3.06%

Mercadolibre Inc. (MELI) $1,990.11 2.34%

Intuitive Surgical Inc. (ISRG) $493.72 2.30%

Micron Technology Inc. (MU) $89.05 2.26%

Baidu Inc. (BIDU) $94.47 2.03%

NetEase Inc. Ads (NTES) $104.42 1.97%

Liberty Global plc Series A (LBTYA) $11.62 1.75%

Nasdaq 100 - Fallers

American Airlines Group (AAL) $11.46 -8.32%

Qvc Group Inc Series A (QVCGA) $0.23 -7.79%

Expedia Group Inc. (EXPE) $163.75 -7.28%

Sirius XM Holdings Inc (SIRI) $22.70 -6.93%

Skyworks Solutions Inc. (SWKS) $68.23 -5.30%

PACCAR Inc. (PCAR) $104.72 -5.28%

Paychex Inc. (PAYX) $146.50 -5.19%

Texas Instruments Inc (TXN) $177.34 -4.91%

Charter Communications Inc. (CHTR) $355.87 -4.73%

Biogen Inc (BIIB) $143.66 -4.68%