Wall Street Roiled as Trump Steps Up His Trade War: Markets Wrap

(Bloomberg) -- Volatility persisted in US assets following Monday’s wrenching session, with an early rebound in stocks erased amid signs of an escalating trade war. Industrial shares got hammered while Donald Trump’s fresh tariff threats drove down the Canadian dollar.

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Equities pushed lower as concern about the impact of Trump’s trade war on the world’s largest economy spurred warnings about the near-term outlook for American shares. All major groups in the S&P 500 fell, with the benchmark gauge extending a slide from its all-time highs to more than 9%. Wall Street’s so-called fear gauge - the VIX - climbed toward the highest level since the Aug. 5 crash, when talks about a US recession shook global markets.

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Trump said he would increase steel and aluminum tariffs on Canada to 50% to retaliate against Ontario’s move raising taxes on electricity sent to the US. The US president said he would also “substantially increase” tariffs on Canadian automobile parts on April 2 if Ottawa does not drop tariffs on dairy products and other US goods.

“Markets dropped again on Trump’s latest trade bombshell,” said Fawad Razaqzada at City Index and Forex.com. “Investor fears were stoked by President Trump’s aggressive tariff policies targeting America’s largest trading partners, sending shockwaves through the financial landscape.”

The S&P 500 fell 0.9%. The Nasdaq 100 fell 0.5%. The Dow Jones Industrial Average fell 1.4%.

The yield on 10-year Treasuries advanced three basis points to 4.25%. The Bloomberg Dollar Spot Index fell 0.4%.

Key events this week:

• Canada rate decision, Wednesday

• US CPI, Wednesday

• Eurozone industrial production, Thursday

• US PPI, initial jobless claims, Thursday

• US University of Michigan consumer sentiment, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 fell 0.9% as of 12:44 p.m. New York time

• The Nasdaq 100 fell 0.5%

• The Dow Jones Industrial Average fell 1.4%

• The Stoxx Europe 600 fell 1.7%

• The MSCI World Index fell 0.9%

Currencies

• The Bloomberg Dollar Spot Index fell 0.4%

• The euro rose 0.9% to $1.0927

• The British pound rose 0.5% to $1.2943

• The Japanese yen was little changed at 147.33 per dollar

Cryptocurrencies

• Bitcoin rose 2.9% to $81,607.68

• Ether rose 3.4% to $1,931.11