By Karen Langley and Katy Barnato

Stocks tumbled Tuesday after President Trump imposed tariffs on imports from Mexico and Canada, dragging the Nasdaq Composite into correction territory and erasing the S&P 500's postelection gains.

The tech-heavy Nasdaq fell 1.6%, leaving it down more than 10% from its recent high in December. The benchmark S&P 500 was down 1.7%, on track for its lowest close since before the Nov. 5 election. The Dow Jones Industrial Average dropped 1.7%.

The declines were widespread, with economically sensitive corners of the market hit especially hard.

The financial sector slumped 3.9%, making it the S&P 500's worst performer, as Citigroup shares declined 7.9%, Bank of America shares fell 7.4% and JPMorgan Chase shares dropped 5.2%.

Cruise lines, resorts and automakers fell, as did most industrial stocks. Caterpillar shares were off 3%, while United Airlines and Delta Air Lines fell more than 6%.

The CBOE Volatility Index, or VIX, known as Wall Street's fear gauge, climbed more than 10%, after ending Monday at its highest level of the year.

In bond markets, the yield on the benchmark 10-year U.S. Treasury note slipped to 4.140%, from 4.178% on Monday, its lowest close of 2025. Yields fall as bond prices rise.

Gold rallied, in another sign of mounting caution among investors.

Agricultural commodities targeted by Chinese retaliatory tariffs also fell, with cotton, corn, soybeans and wheat trading lower.

Write to Karen Langley at karen.langley@wsj.com

(END) Dow Jones Newswires

March 04, 2025 11:32 ET (16:32 GMT)

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