U.S. stocks plummeted again on Tuesday, with the Dow Jones Industrial Average dropping 670 points as President Donald Trump’s newly imposed 25% tariffs on goods from Canada, Mexico, and China prompted retaliatory measures from some of the affected countries.
China imposed additional duties of up to 15% on certain U.S. products. Ottawa retaliated with 25% tariffs on $30 billion worth of U.S. goods starting Tuesday, rising to cover $125 billion of merchandise in 21 days. Canada’s provinces are taking their own actions, and irate citizens are boycotting U.S. products.
As the day ended in New York, the Nasdaq $NDAQ Composite dipped by 0.3%, while the Dow Jones Industrial Average shed 670 points or 1.5%. The S&P 500, which had its worst day of the year on Monday, dropped 1.2%.
Tesla stock drops following a downgrade
Tesla $TSLA (TSLA) stock declined on Tuesday due to rising fears about tariffs among investors — car prices may be driven higher by the duties. The company also has a large presence in China, including a major assembly plant, and so may be vulnerable to retaliation by Beijing.
Additionally, Bank of America $BAC (BAC) reduced its price target for the stock to $380 from $490 while maintaining a Neutral rating. Morgan Stanley $MS analyst Adam Jonas yesterday designated Tesla stock as a “Top Pick” in the U.S. automotive sector and raised his price target to $430.
Target and Best Buy CEOs fear tariffs will raise prices
Target $TGT’s (TGT) stock fell after it said it expects a “meaningful” year-on-year decline in first-quarter profits compared and CEO Brian Cornell warned that the new tariffs may prompt the retailer to increase prices as soon as next week. The company’s fourth-quarter earnings beat Wall Street’s expectations.
Best Buy $BBY (BBY) stock dropped 12% after company executives warned that the duties could increase the prices of goods it sells and could reduce its comparable sales if they stay in place for a full year. The electronics retailer reported fourth-quarter results that exceeded Wall Street’s expectations.
Chipotle depends on Mexican avocados
Chipotle $CMG (CMG) shares declined due to concerns about the restaurant chain’s dependence on avocados that are 50% sourced from Mexico. The company has said its diverse supply chain could help it withstand the tariffs.
— Francisco Velasquez and Josh Fellman contributed to this article.