Stocks dive after Trump promises tariffs on steel
U.S. stocks dove in another dizzying day of trading after President Donald Trump promised Thursday to deliver stiff tariffs on imported steel and aluminum, which raised the threat of escalating retaliation by other countries and higher inflation. The Standard & Poor’s 500 index erased nearly all of its gains for the year.
Indexes had been bouncing between modest gains and losses earlier in the day, until Trump told industry executives at midday that they’ll “have protection for the first time in a long while” and that he’s planning to impose tariffs of 25 percent on steel imports and 10 percent on aluminum imports next week.
“I don’t know if this will cause a trade war, and obviously that’s the fear,” said Lamar Villere, portfolio manager at investment manager Villere & Co. “But this is exactly what candidate Trump said he would do: He said he would be very protectionist and America First.”
The Standard & Poor’s 500 index tumbled 36.16 points, or 1.3 percent, to 2,677.67. It’s the third straight day where the index has lost at least 1 percent. It had only four such days last year. The S&P 500 is now up just 0.2 percent for the year after having its best January in 20 years.
The Dow Jones industrial average dropped 420.22 points, or 1.7 percent, to 24,608.98, and the Nasdaq composite fell 92.45, or 1.3 percent, to 7,180.56.
Shares of U.S. steelmakers surged on the tariff news. U.S. Steel rose $2.50, or 5.7 percent, to $46.01. But shares of companies that use lots of steel fell, as did exporters.