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Stocks erased what had looked like the start of a comeback earlier in the trading day after President Trump said he’s boosting Canadian steel and aluminum tariffs to 50%.
In addition to these tariffs, Trump also threatened to “substantially increase” tariffs on cars coming into the US from Canada, adding in a post on Truth Social that these tariffs, “will, essentially, permanently shut down the automobile manufacturing business in Canada. Those cars can easily be made in the USA!”
The tech-heavy Nasdaq Composite (^IXIC) eliminated gains to fall around 0.6% while the S&P 500 (^GSPC) and Dow Jones Industrial Average (^DJI) accelerated losses to decline about 1% and 1.4%, respectively. The blue-chip index was dragged down by shares of Verizon (VZ), which fell roughly 7%.
The moves follow Monday’s brutal sell-off, which saw the Nasdaq fall 4% to log its worst daily loss since 2022 as the “Magnificent Seven” megacaps faltered. But shares of Tesla (TSLA) rebounded in early trade after a show of support from President Donald Trump.
The mood on Wall Street has grown increasingly foreboding as investors gauge the chances of stagflation amid deep cuts to firms’ economic forecasts and an upending in the markets’ thinking on economic growth.
That has put the focus on two key inflation reports later this week, February’s Consumer Price Index (CPI) print due Wednesday and the Producer Price Index (PPI) for the same month on Thursday.
Labor market data released Tuesday was largely in line with Wall Street’s expectations as investors have been watching closely for any further signs of cracks forming in the US economy.
Read more: The latest on Trump’s tariff plans
On the corporate front, Delta Air Lines (DAL) stock slid after the carrier cut its outlook for the current quarter late Monday, citing “macro uncertainty.” Peers Southwest (LUV) and American Airlines (AAL) also flagged headwinds on Tuesday, reflecting economic pressures on corporate performance.
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Citi latest firm to downgrade US stocks to Neutral
More Wall Street strategists are souring on US stocks on the heels of recent sell-off action.
On Tuesday, Citigroup strategists downgraded their view on US stocks to Neutral from Overweight, citing bearish signals such as expected negative US data prints and uncertainty over tariffs and government job cuts.
“We had not fully implemented our view that US exceptionalism is at least pausing, but this has now become clearer,” Citi said. The group also upgraded China stocks to Overweight but left equities overall Neutral.
“In the big picture, US equity outperformance may well return when the AI narrative takes over again, but in the coming months, we expect US growth momentum to undershoot the [rest of the world].”
Citi is not the only firm that downgraded US equities in favor of more global trades. For other Wall Street watchers, European stocks have also been on a recent hot streak.
“Prior to the US elections, we assumed that a Trump victory would reinforce US exceptionalism,” HSBC global equity strategist Alastair Pinder wrote on Monday.
“Today, we are upgrading Europe (ex-UK) to overweight (from underweight) and downgrading the US to neutral.”
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Trump boosts Canadian steel, aluminum tariffs to 50%
President Donald Trump on Tuesday said he’s boosting Canadian steel and aluminum tariffs to 50%, with the new duties set to go into effect on Wednesday.
In a post on Truth Social, the president said the increase is in response to Ontario Premier Doug Ford’s decision to impose a 25% surcharge on electricity exports to the United States.
“Based on Ontario, Canada, placing a 25% Tariff on ‘Electricity’ coming into the United States, I have instructed my Secretary of Commerce to add an ADDITIONAL 25% Tariff, to 50%, on all STEEL and ALUMINUM COMING INTO THE UNITED STATES FROM CANADA, ONE OF THE HIGHEST TARIFFING NATIONS ANYWHERE IN THE WORLD,” Trump wrote.
Stocks erased earlier gains following Trump’s post, with the Nasdaq falling from session highs to trade just around the flatline.
The Dow fell nearly 1% while the S&P 500 dropped around 0.4%.
In addition to these tariffs, Trump also threatened to “substantially increase” tariffs on cars coming into the US from Canada, adding these tariffs, “will, essentially, permanently shut down the automobile manufacturing business in Canada. Those cars can easily be made in the USA!”
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US job openings inch higher in January
Labor market data released Tuesday was largely in line with Wall Street’s expectations as investors watch closely for any further signs of cracks forming in the US economy.
New data from the Bureau of Labor Statistics released Tuesday showed there were 7.74 million jobs open at the end of January, an increase from the 7.51 million seen in December.
The December figure was revised lower than the 7.6 million open jobs initially reported, mamarking the largest sequential drop seen across the data in over a year. Economists surveyed by Bloomberg had expected Tuesday’s report to show 7.6 million openings in January.
The Job Openings and Labor Turnover Survey (JOLTS) also showed 5.39 million hires were made during the month, up slightly from the 5.37 million made during December. The hiring rate held flat at 3.4%.
Tuesday’s report also showed the quits rate, a sign of confidence among workers, rose to 2.1% up from the 1.9% seen the two months prior.
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US stocks extend sell-off
US stocks opened lower on Tuesday, extending the prior session’s brutal sell-off as fears escalated over the health of the US economy.
The Dow Jones Industrial Average (^DJI) and the S&P 500 (^GSPC) each fell around 0.2%, losing hold of small gains earlier in premarket trading. The tech-heavy Nasdaq Composite (^IXIC) dropped about 0.1% after logging its worst daily loss since 2022.
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Kohl’s stock sinks in wake of gloomy outlook
Kohl’s (KSS) put out a downbeat 2025 outlook this morning, driving a 16% tumble in shares before the bell.
The department store forecast profit below Wall Street estimates, and it now sees a deeper drop in sales than expected.
Kohl’s now sees earnings per share of between $0.10-$0.60, versus the $1.23 anticipated. Comparable sales are expected to fall 4% to 6%, compared with the 0.9% expected.
The gloomy view is just the latest sign that retailers are under pressure as American shoppers concerned about inflation and a trade war choose to spend carefully.
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Tesla stock rises, heads for rebound from deep sell-off
Tesla’s (TSLA) stock is gearing up for a comeback — again.
The EV maker’s shares rose over 2% in premarket trading, having fallen a whopping 15% to lead broader stock losses in Monday’s washout. One possible explanation? President Trump’s promise to “buy a brand new Tesla” as a show of support for CEO Elon Musk.
But as Yahoo Finance’s Hamza Shaban notes, Tesla’s stock has shaken off pressure many, many times before. He reports:
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European stocks are the hottest trade on Wall Street as investors turn away from US ‘exceptionalism’
Yahoo Finance’s Ines Ferré reports:
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Airline stocks stumble after Delta cuts outlook, citing ‘macro uncertainty’
Airline stocks sank in premarket trading Tuesday after Delta Air Lines (DAL) cut its outlook for the current quarter, citing softening domestic demand amid “macro uncertainty.”
Delta stock fell 7%, while United Airlines declined 4.5%, and American Airlines (AAL) dropped 3% as concerns swirled about a consumer slowdown.
In a release on Monday, Delta revised its revenue growth to 3%-4% for the first quarter, down from 7%-9% previously forecast, Yahoo Finance’s Josh Schafer reported. Profits are also expected to take a hit, with earnings per share expected to be in a range of $0.30-$0.50 in the first quarter, down from $0.70-$1.00 previously.
Then, on Tuesday, American forecast a bigger first quarter loss, as tariff pressures and government spending uncertainty weighed on the outlook for travel demand.
Southwest (LUV) also cut its revenue growth forecast, though shares rose after the budget carrier announced it would begin charging for some checked bags in an effort to boost earnings. The policy shift hinted at the growing influence of activist investor Elliott Management at the company as it pushes to revamp Southwest’s business model.
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Something to watch: DOGE ripples
An early trend to call out as we get ready for earnings season in a few weeks: the DOGE impact on corporate America.
Southwest (LUV) mentioned “less government travel” in its sales warning today. Delta (DAL) CEO Ed Bastian slightly hinted at an impact in a TV interview following its own sales warning late on Monday.
HPE (HPE) CEO Antonio Neri tells me he is monitoring the potential impact of DOGE — which for his company would come in the form of fewer server orders.
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Good morning. Here’s what’s happening today.
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Wall Street’s 2025 forecasts are falling apart for one simple reason
Yahoo Finance’s Josh Schafer reports:
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Gold rebounds as investors weigh US outlook, tariff concerns
Gold (GC=F) rose past $2,900 an ounce as Wall Street’s sell-off eased, though investor concerns over the US economy persisted.
Bloomberg News reports:
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In the second Trump administration, the Vice President talks to the stock market
President Donald Trump has taken a different approach to the stock market during his second term in office.
Namely: he appears to have outsourced the responsibility.
And after a sharp sell-off across the stock market on Monday saw post-election gains across the major indexes and several key tech stocks that have powered the market wiped out, it was not the president, but rather the vice president that appeared to do the talking to investors.
In a post on X, the social media platform owned by Elon Musk, a key member of Trump’s administration, Vice President JD Vance said companies that build in the US will be rewarded; for companies building outside the US, “you’re on your own.”
Last week, the president said, “I’m not even looking at the market” as the rollout of his tariff policy shook investor confidence.
Unlike his first term in office, Trump has also not spoken explicitly about the Federal Reserve and his view on policy. (Last time around, Trump repeatedly called for lower rates.)
Instead, Treasury Secretary Scott Bessent has repeatedly expressed a view that Treasury yields should be lower amid Trump’s push to clean up the federal budget and rein in spending across the government.
Given the speed and depth of the market’s sell-off since hitting record highs on Feb. 19, however, we’ll see how long the president can hold this new line.
