Dow drops more than 300 points, Nvidia gains lift Nasdaq into positive territory: Live updates

The Dow Jones Industrial Average and S&P 500 saw losses mount on Tuesday as President Donald Trump‘s tariffs on key trade partners took effect and prompted retaliatory measures, triggering a global trade war and escalating fears of the national economy cracking.

The Dow dropped 401 points, or 0.9%, building on Monday’s plunge of nearly 650 points. The S&P 500 shed 0.6%.

The Nasdaq Composite added 0.2%, buoyed by gains of more than 2% in Nvidia and Alphabet. The index saw an intraday reversal after sliding more than 2% at session lows. During the session, the Nasdaq has flirted with correction territory, a term that refers to an index falling 10% from a recent high.

Tuesday’s action comes after the U.S. instituted 25% duties on Canada and Mexico that took effect at midnight. Trump also slapped an additional 10% tariff on Chinese goods.

“There is a decidedly ‘Risk Off’ trade in the market over the last week or so,” said Brian Mulberry, client portfolio manager at Zacks Investment Management. “Now that some tariffs are a reality, the mood of investors is turning more negative.”

China retaliated with additional tariffs of up to 15% on some U.S. products. Mexican President Claudia Sheinbaum said the U.S.’ southern neighbor would respond with tariffs and other tools that would be announced this weekend.

Canadian Prime Minister Justin Trudeau said his country would also put a 25% levy on U.S. goods. Trump said in response that he would add even higher tariffs on the country.

Shares of GM and Ford dropped more than 3% and 2%, respectively, building on declines seen this year amid concerns that tariffs would raise costs. Chipotle, which sources about half of its avocados from Mexico, slipped more than 2%.

This week’s decline pushed the S&P 500 into the red for 2025. Because investors hoped that a last-minute deal could be reached to sidestep the full taxes on Mexico and Canada, losses steepened in Monday’s session after Trump confirmed the long-awaited levies were coming. Nearly 4 out of every 5 S&P 500 stocks traded down on Tuesday, and the small-cap focused Russell 2000 was also down.

Paired with soft economic data released recently, the tariffs have given market participants further reason for worry about the health of the U.S. economy. Bank and retail stocks led the way down on Tuesday as investors feared that the levies would hurt these sectors, which are viewed as being closely tied to the broader economic landscape.

“While Tuesday’s tariffs are a go, it remains very unclear on just how long these tariffs will remain,” said Clark Geranen, chief market strategist at CalBay Investments. “We tend to believe these are more of a negotiation tactic and not the start of a long and drawn out reciprocal trade war. Still, in these situations, investors sell first and ask questions later.”

With Tuesday’s losses, the S&P 500 now trades below where it finished on Election Day in November, when Trump won his second term in office. Traders will closely monitor Trump’s address to Congress on Tuesday night for statements about the tariffs, which were a core pillar of his campaign.