The stock market tanked Tuesday after President Donald Trump announced another round of tariffs on Canadian steel and aluminum, sending investors scrambling.
The Dow Jones Industrial Average sank 400 points (0.9%), the S&P 500 fell 0.4%, and the Nasdaq Composite managed to hold a 0.1% gain, according to data from CNBC. The S&P 500 is now sitting less than 1% away from correction territory, a red flag for traders who have been watching equities bleed for weeks.
The sell-off came after Trump posted on Truth Social, doubling tariffs on Canadian steel and aluminum from 25% to 50%, effective Wednesday.
This, of course, is part of the ongoing trade war that has already hammered stocks, with previous tariffs on China, Mexico, and Canada driving massive losses. In his post, Trump justified the move by pointing at Ontario’s 25% tariff on U.S. electricity and Canada’s massive dairy tariffs.
Trump warns Canada of more tariffs
Trump didn’t stop at steel and aluminum. He warned that if Canada doesn’t remove tariffs on U.S. dairy, he will slap new duties on Canadian-made cars by April 2nd, threatening to cripple the country’s auto industry. His post read:
“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. This will go into effect TOMORROW MORNING, March 12th.”
He also called for Canada to immediately drop its ‘Anti-American Farmer Tariff’ of 250% to 390% on U.S. dairy products, calling it “outrageous.” If that doesn’t happen, Trump said auto tariffs are next, a move that analysts say could wreck Canada’s auto manufacturing sector.
Adding fuel to the fire, Trump threatened to declare a National Emergency on Electricity, claiming that Canada’s policies are an “abusive threat” to the U.S. economy.
Trump also once again floated the idea of Canada becoming the 51st U.S. state. In a separate post on Truth Social, he said that if Canada joined the U.S., all tariffs would disappear, taxes would drop, and the two countries would become “bigger, better, and stronger than ever.”
“The only thing that makes sense is for Canada to become our cherished Fifty-First State. This would make all Tariffs, and everything else, totally disappear,” Trump wrote.
He continued: “Canadians’ taxes will be very substantially reduced, they will be more secure, militarily and otherwise, than ever before, there would no longer be a Northern Border problem, and the greatest and most powerful nation in the World will be bigger, better and stronger than ever — And Canada will be a big part of that.”
Bitcoin seems to stabilize, but a short squeeze might be coming for stocks
Investors have had enough. The Nasdaq Composite has now plunged more than 10% from its record high in late 2024, officially entering correction territory. The S&P 500 is down 9% from its peak in February, and the Dow Jones is sliding further away from its 200-day moving average.
The collapse was enough for Citigroup to lower its rating on U.S. stocks, citing a “pause in U.S. exceptionalism” as their reasoning.
While stocks crash, Bitcoin seems to be holding its ground. After falling to $76,000 earlier, it has bounced back to $81,300 at press time, per data from CoinGecko. The crypto market’s stability is catching attention, with traders wondering if it’s a sign that equities might also find a bottom soon.
Some analysts believe stocks are set for a short squeeze. Since February 19th, the S&P 500 has erased $5 trillion in market value, marking its worst one-sided selloff since the 2022 bear market.
Hedge funds have noticed, seeing as total PUT option volumes hit a record-breaking 30 million contracts over the past five days, an unprecedented level of bearish positioning, according to CME. But new data from Goldman Sachs shows that hedge funds are starting to turn net positive on equities, which could trigger a violent rebound in stocks.
Adding to the speculation, Trump posted about Tesla stock, saying he was buying a new Tesla “as a show of confidence” in Elon Musk. It’s unclear if this was meant to signal something larger, but it was his first direct show of support for the markets since the recent downturn.
When asked about a possible U.S. recession, Trump responded, “I would hate to predict something like that.” He added, “It will be great,” while also acknowledging there could be “short-term pain.”
Cryptopolitan Academy: Coming Soon – A New Way to Earn Passive Income with DeFi in 2025. Learn More
Earn more PRC tokens by sharing this post. Copy and paste the URL below and share to friends, when they click and visit Parrot Coin website you earn: https://parrotcoin.net0
PRC Comment Policy
Your comments MUST BE constructive with vivid and clear suggestion relating to the post.
Your comments MUST NOT be less than 5 words.
Do NOT in any way copy/duplicate or transmit another members comment and paste to earn. Members who indulge themselves copying and duplicating comments, their earnings would be wiped out totally as a warning and Account deactivated if the user continue the act.
Parrot Coin does not pay for exclamatory comments Such as hahaha, nice one, wow, congrats, lmao, lol, etc are strictly forbidden and disallowed. Kindly adhere to this rule.
Constructive REPLY to comments is allowed