Wall Street stocks finished solidly lower Thursday after a Trump administration announcement of tariffs on steel and aluminum imports from Europe, Canada and Mexico deepened fears of a trade war.
The Dow Jones Industrial Average finished down 1.0 percent or 250 points at 24,415.84.
The broad-based S&P 500 shed 0.7 percent to close at 2,705.27, while the tech-rich Nasdaq Composite Index declined 0.3 percent to 7,442.12.
Stocks were under pressure the entire session following an announcement from Commerce Secretary Wilbur Ross that the US would impose stiff tariffs on metals imports from some of its most longstanding allies.
Losses deepened later in the session, especially when the US policy was denounced by Canadian Prime Minister Justin Trudeau, who announced retaliatory duties on up to Can$16.6 billion (US$12.8 billion) in American imports.
“These tariffs are an affront to the long standing security partnership between Canada and the United States, and in particular, an affront to the thousands of Canadians who have fought and died alongside their American brothers in arms,” Trudeau said, dismissing the US national security justification for its measures.
Mexico also announced retaliatory duties, and the EU is expected to do so soon.
Companies heavily leveraged to international trade, including Caterpillar and Boeing were among the biggest losers in the Dow, shedding 2.3 percent and 1.7 percent, respectively.
Yet the market’s overall losses, while not insignificant, were also well below those suffered on the worst trading days earlier this spring.
“Yes there are some pretty ominous headlines, but the market is taking it pretty well,” said Jack Ablin of Cresset Wealth Advisors.
“There is somewhat of a credibility issue with this administration just because they continuously change their tack all the time,” Ablin added. “Investors believe that most of it is posturing and is not policy.”
Most sectors of the S&P 500 finished in negative territory, with utilities scraping out a modest gain and technology flat.
Tech giants Expedia and Facebook both won more than two percent and Google-parent Alphabet climbed 1.6 percent.
General Motors powered 12.9 percent higher after it announced that Japanese telecom giant SoftBank will invest $2.25 billion in the company’s autonomous car program.
US shares of Deutsche Bank dropped 4.2 percent as its travails with US regulators deepened. The bank’s US unit has been designated a “problem bank” by Federal Deposit Insurance Commission, a person familiar with the matter told AFP.
The big German bank also was downgraded to “troubled condition” by the Federal Reserve, the Wall Street Journal reported Thursday.