The tech-heavy Nasdaq ended the day down 65.03 points (0.4%) at 18,285.16 after plunging by as much as 2.1% to a nearly five-month intraday low. The S&P 500 briefly reached positive territory but closed down 71.57 points (1.2%) at a four-month closing low of 5,776.15. The Dow also slumped 670.25 points (1.6%) to 42,520.99.
Canada announced 25% retaliatory tariffs on C$155 billion of American goods, starting with tariffs on C$30 billion worth of goods immediately and tariffs on the remaining C$125 billion in 21 days' time. In a subsequent post on Truth Social, Trump said Canada putting a retaliatory tariff on the U.S. will lead to a reciprocal tariff by the same amount. Meanwhile, Mexican President Claudia Sheinbaum said her government has made "contingency plans" to respond to the new tariffs. China also said it would impose additional tariffs of 10 to 15% on several agricultural goods, including soybeans, corn, dairy and beef.
Banking stocks turned in some of the market's worst performances on the day, with the KBW Bank Index plunging by 4.6%. Airline stocks saw substantial weakness, as reflected by the 3.9% nosedive by the NYSE Arca Airline Index. Brokerage stocks too significant moved downwards, dragging the NYSE Arca Broker/Dealer Index down by 3.4%. Steel, utilities and commercial real estate stock also ended the day notably lower while some strength emerged among gold and semiconductor stocks.
Asia-Pacific stocks moved mostly lower. Japan's Nikkei 225 Index slumped 1.2% while Hong Kong's Hang Seng Index fell by 0.3%. The major European markets also showed significant moves to the downside while the German DAX Index plunged by 3.5%, the French CAC 40 Index dove by 1.9% and the U.K.'s FTSE 100 Index tumbled by 1.3%.
In the bond market, treasuries moved modestly lower over the course of the session after seeing early strength. As a result, the yield on the benchmark ten-year note which moves opposite of its price, rose 3.0 bps to 4.21% after hitting a low of 4.10%.