NEW YORK — U.S. stock markets ended Tuesday with notable declines, driven by escalating trade tensions between the United States and Canada. The Dow Jones Industrial Average fell 478.23 points, or 1.14%, closing at 41,433.48. The S&P 500 dropped 42.49 points, or 0.76%, ending at 5,572.07. The Nasdaq Composite slipped 32.23 points, or 0.18%, to finish at 17,436.10.

Trade Disputes Intensify

President Donald Trump announced plans to double tariffs on Canadian steel and aluminum imports to 50%, retaliating against Ontario’s 25% surcharge on electricity exports to the U.S. This announcement heightened investor anxiety, leading to increased market volatility.

Ontario Premier Doug Ford responded by suspending the electricity surcharge, prompting the U.S. to revert to a 25% tariff. Despite this de-escalation, the uncertainty surrounding trade policies continued to weigh heavily on market sentiment.

Market Volatility and Investor Sentiment

The S&P 500 briefly entered correction territory, dropping more than 10% below its record high before paring losses. The CBOE Volatility Index (VIX), a measure of market volatility, spiked, reflecting heightened investor anxiety.

“The market’s nervousness stems from unpredictable trade policies,” said Ken Polcari, chief market strategist at SlateStone Wealth. “Investors are reacting swiftly to headlines, leading to increased volatility.”

Sector Performance

Industrials and consumer discretionary sectors experienced significant declines. Delta Air Lines reduced its sales and profit forecasts, citing economic uncertainty, leading to a 7.2% drop in its stock. Other travel-related stocks, including Expedia Group, also faced declines.

Conversely, some technology stocks showed resilience. Tesla shares rose nearly 4%, and Nvidia gained almost 2%, providing some support to the Nasdaq Composite.

Economic Indicators

The Labor Department reported an increase in job openings to 7.74 million in January, suggesting a tight labor market. However, concerns about inflation and potential interest rate hikes persist, adding to market uncertainty.

Global Market Reaction

European markets mirrored U.S. declines. The FTSE 100 fell 0.2%, and Germany’s DAX dropped 0.6%. Asian markets closed mixed; Japan’s Nikkei 225 decreased by 0.6%, while China’s Shanghai Composite edged up 0.3%.

Analyst Perspectives

Analysts caution that ongoing trade disputes could hinder economic growth and elevate inflation. Major banks have adjusted economic forecasts, reflecting concerns over policy unpredictability.

“The current uncertainty could dampen economic growth and lead to inflation,” warned analysts at Goldman Sachs. “Investors should brace for continued volatility.”

Outlook

As trade tensions persist, markets are likely to remain volatile. Investors are advised to monitor developments closely and consider the potential impacts on various sectors.

Note: This article reflects market conditions as of March 11, 2025.