U.S. stocks plummeted again on Tuesday, with the Dow Jones Industrial Average dropping up to 700 points as President Donald Trump’s newly imposed 25% tariffs on goods from Canada, Mexico, and China prompted retaliatory measures from some of the affected countries.
China imposed additional duties of up to 15% on certain U.S. products. Ottawa retaliated with 25% tariffs on $30 billion worth of U.S. goods starting Tuesday, rising to cover $125 billion of merchandise in 21 days. Canada’s provinces are taking their own actions, and irate citizens are boycotting U.S. products.
At about 12:35 p.m., in New York, the Nasdaq Composite dropped 0.6%, while the Dow Jones Industrial Average shed 578 points or 1.3%. The S&P 500, which had its worst day of the year on Monday, dropped 1%.
Tesla (TSLA-4.26%) stock declined more than 4.5% due to rising fears about tariffs among investors — car prices may be driven higher by the duties. The company also has a large presence in China, including a major assembly plant, and so may be vulnerable to retaliation by Beijing.
Additionally, Bank of America (BAC-5.59%) reduced its price target for the stock to $380 from $490 while maintaining a Neutral rating. Morgan Stanley analyst Adam Jonas yesterday had designated Tesla stock as a “Top Pick” in the U.S. automotive sector and raised his price target to $430.
Target’s (TGT-3.49%) stock fell 4.5% after it said it expects a “meaningful” year-on-year decline in first-quarter profits compared and CEO Brian Cornell warned that the new tariffs may prompt the retailer to increase prices as soon as next week. The company’s fourth-quarter earnings beat Wall Street’s expectations.
Best Buy (BBY-12.79%) stock dropped 12% after company executives warned that the duties could increase the prices of goods it sells and could reduce its comparable sales if they stay in place for a full year. The electronics retailer reported fourth-quarter results that exceeded Wall Street’s expectations.
Chipotle (CMG-2.59%) shares declined due to concerns about the restaurant chain’s dependence on avocados that are 50% sourced from Mexico. The company has said its diverse supply chain could help it withstand the tariffs.
— Francisco Velasquez and Josh Fellman contributed to this article.
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