U.S. stocks racked up heavy losses for a second straight day in a volatile session that had investors fixated on President Trump's ever-evolving trade war with Canada. Kelly O'Grady explains.

New York

Donald Trump has signed an order to impose tariffs imports into the U.S. from countries including China, Mexico and Canada.

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U.S. stocks experienced heavy losses, continuing a trend seen in recent days. The decline came amid volatility driven largely by President Trump’s changes in tariff policies affecting trade with Canada. Trump canceled a planned additional 25% tariff on Canadian steel and aluminum after Ontario's premier decided to pause a 25% tariff on energy imports from the United States, which had been a response to earlier U.S. tariffs. 

Major stock indices were affected, with the Dow dropping by as much as 700 points at one stage during the trading session. Contributing to market uncertainty were other factors, such as the potential for a ceasefire in Ukraine and consumers' reduced spending, as highlighted by reports from retailers and airlines. Upcoming economic indicators such as inflation data and consumer sentiment are being closely watched, along with a forthcoming decision on interest rates.

The ongoing trade tensions between the U.S. and Canada have created challenges for businesses heavily reliant on cross-border trade. Particularly hard hit are industries like construction, automotive, and manufacturing, which depend on competitively priced steel and aluminum. While the shift in tariff strategies may mean a push for more domestic manufacturing, increased costs for vital materials could hamper economic growth in that sector.



Wall Street reacts to Trump's tariff flip-flopping with Canada

We begin with the rollercoaster ride on Wall Street today that left even the strongest stomachs feeling a little uneasy. The up and down ended with all down. Every major index in the red. It was due in large part to the tariff chaos. President Trump canceled his threatened additional 25% tariff on Canadian steel and aluminum after Ontario's premier paused his 25% tariff on energy to the United States, which was originally imposed as retaliation to other U.S. tariffs that are still going into effect. Our Money Watch correspondent, Kelly O'Grady, is here to try and make sense of all of this because even in reading that, Kelly, I got a little lost. What did you make of what the markets did today? Even more uncertainty, which by the way, I think is my most used word now, even more than tariffs, if you can believe it. Yeah, you should have gone long on uncertainty. Right, I know, there's still time. Look, the Dow was down 700 points at one point, the NASDAQ was up, and you just had all of this data to digest, a potential ceasefire in Ukraine, all of this tariff turmoil. By the way, at the beginning of the day, we heard retailers and airlines paint a very glum picture for the consumer that they're pulling back on spending. So it wasn't as bad as yesterday, but investors are jittery and I'm really looking ahead to inflation data tomorrow, consumer sentiment on Friday, and an interest rate decision next Wednesday. And you and I both know when Chair Jerome Powell talks, the markets move. Right, almost as powerful as when the president talks. Is this sustainable, this back and forth between the U.S. and Canada? It's gonna be really hard to weather this uncertainty if you're a business. I mean, the U.S. and Canada, we rely so much on each other. Take aluminum and steel, for example. I mean, we buy so much of that from them, but they sell the majority of their product to us. You can't just find another buyer. And so I think what's really tough for businesses is you get into a bit of a paralysis. Do you hire, do you lay off, do you invest? So can they survive? Yes. Will they thrive? That's gonna be harder. The president's tariff on steel and aluminum is not at 50, but it's at 25. What's that gonna cause? Home building prices are likely gonna go up, auto as well, defense. And the one that I'm looking at is manufacturing, because these other tariffs, these broader tariffs are designed to bring manufacturing here, but I've talked to tons of folks in the manufacturing space and they're saying, well, now we're gonna have to pay more for aluminum and steel, which are really critical for those building projects. So there might be more manufacturing, but it'll be more expensive to do. Which is exactly what happened last time, and you saw less hiring because of those aluminum and steel tariffs in manufacturing.

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Jakarta

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Kyiv

Ukraine Invasion

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