On Tuesday, US benchmark equity indexes faced a significant downturn as China and Canada implemented tariffs on a range of US products, intensifying fears of an impending trade war. The Dow Jones Industrial Average recorded a decline of 1.6%, closing at 42,521 points, while the S&P 500 fell by 1.2% to 5,778.2.
The Nasdaq Composite encountered a smaller loss of 0.4%, ending the day at 18,285.2. This downward trend affected nearly all sectors, with the financial sector seeing the most substantial losses, although technology managed to post a marginal gain. In the bond market, US Treasury yields presented a mixed picture.
The 10-year Treasury yield climbed by 8.6 basis points, reaching 4.245%, while the two-year yield eased by 2.6 basis points to settle at 3.984%. Turning to commodities, April West Texas Intermediate crude oil saw a slight dip of 0.2%, priced at $68.25 per barrel as of Tuesday. On the economic front, Canada has initiated a set of tariffs targeting $30 billion worth of US goods, responding to President Donald Trump's imposition of 25% tariffs on Canadian and Mexican products.
Concurrently, China has enacted levies ranging from 10% to 15% on US food and agricultural imports, alongside placing restrictions on 25 US companies regarding export and investment opportunities. Mexican President Claudia Sheinbaum indicated that her government would retaliate with countermeasures, though specific details were not disclosed immediately, as reported by Reuters. DeVere Group highlighted that the retaliatory tariffs would adversely affect American agricultural exports, auto parts, and crucial industries that rely heavily on North American trade agreements. In the realm of corporate news, Best Buy ($BBY) experienced a steep decline of 13%, marking the largest drop on the S&P 500.
CEO Corie Barry cited potential price increases as a direct consequence of the tariffs, noting that the company’s full-year earnings outlook fell short of Wall Street's expectations at the midpoint. Meanwhile, Walgreens Boots Alliance ($WBA) is edging closer to finalizing a go-private transaction with Sycamore Partners valued at approximately $10 billion, according to a report from The Wall Street Journal.
Following this news, Walgreens' shares surged by 5.6%, making it the third-largest gain on the S&P. Super Micro Computer ($SMCI) shares climbed by 8.5%, rebounding from a prior decline and marking the second-largest gain on the S&P for the day. Additionally, BofA Securities remarked that Vistra's ($VST) current valuation fails to encapsulate the robustness of its core business, which appears well-positioned for growth independent of data center-related deals.
Consequently, shares of Vistra increased by 2.4%. On the commodities front, gold prices rose by 0.9% to reach $2,927.2 per troy ounce, while silver experienced a smaller uptick of 0.7%, priced at $32.54 per troy ounce..