US benchmark equity indexes experienced a decline during intraday trading as both Canada and China retaliated against the recent trade tariffs imposed by the Trump administration. The Dow Jones Industrial Average slid 1.3% to 42,658, while the S&P 500 decreased by 0.9%, settling at 5,795.5. Meanwhile, the Nasdaq Composite faced a smaller decline of 0.3%, reaching 18,305.4.
Excluding the technology sector, all other market sectors showed negative performance, particularly the financial sector, which led the decline. On Tuesday, the tariffs announced by President Donald Trump, which impose a 25% levy on goods imported from Canada and Mexico, were enacted. Concurrently, the US government extended its taxes on Chinese imports, escalating them to 20%.
The response from China and Canada was swift and retaliatory, with Beijing implementing a 15% tariff on various imports, including chicken and wheat, along with a 10% levy on select additional products. Canada committed to enforcing a 25% tariff on CA$30 billion (approximately $20.65 billion) worth of US goods immediately, and an additional CA$125 billion in tariffs is expected to follow in three weeks. Media reports also indicated that Mexico's response is anticipated by Sunday, referencing comments from President Claudia Sheinbaum.
Analysts at Stifel noted that these developments are likely to disrupt trade relationships with America’s largest trading partners and could lead to immediate supply chain disturbances or elevate price pressure, potentially affecting around $1.5 trillion in goods. In the meantime, US Treasury yields displayed mixed results during the trading session.
The yield for the two-year note dropped by 4.1 basis points to 3.93%, while the ten-year note gained two basis points, rising to 4.2%. In corporate news, Best Buy ($BBY) cautioned about potential price hikes amid the ongoing uncertainties regarding tariffs and issued a full-year earnings forecast that fell below Wall Street's expectations for the midpoint.
Consequently, the electronics retailer saw its shares plunge 12%, marking it as the worst performer on the S&P 500. Similarly, Target ($TGT) shares dropped by 3.4% after the retailer expressed concerns that uncertainties related to consumer spending and tariffs would negatively impact its profits for the ongoing three-month period. On a more promising note, Walgreens Boots Alliance ($WBA) is close to finalizing a deal with private equity firm Sycamore Partners to take the company private for approximately $10 billion.
Reports from The Wall Street Journal suggested that Walgreens shares rose by 7.4% during intraday trading, securing a position among the top gainers on the S&P 500. In commodity markets, West Texas Intermediate crude oil witnessed a decline of 0.4%, trading at $68.07 a barrel. Gold prices surged by 0.7% to reach $2,920.50 per troy ounce, while silver also saw an increase of 0.3%, reaching $32.41 per ounce..