Ford and General Motors fall
Target drops on bleak FY forecast
Walgreens jumps on reports on take-private deal
Updates to US close
By Chibuike Oguh, Johann M Cherian and Sukriti Gupta
NEW YORK, March 4 (Reuters) - The benchmark S&P 500 and Dow finished lower on Tuesday as trade tensions escalated following U.S. President Donald Trump's new tariffs on Canada, Mexico and China.
The 25% tariffs on imports from Mexico and Canada, along with doubled duties on Chinese goods, took effect on Tuesday. China and Canada retaliated while Mexican President Claudia Sheinbaum vowed to respond likewise, without giving details.
"Equity valuations have been very elevated and there's been yellow flags all over the horizon given moves to cut government spending," said Ben McMillan, chief investment officer at IDX Insights in Tampa, Florida. "Now on top of that, we have all this rhetoric around tariffs."
Citigroup C.N and JPMorgan Chase & Co JPM.N fell, sending the bigger banks index .SPXBK lower.
The CBOE market volatility index .VIX rose 0.70% to its highest since December 20.
"The fear here is that it's going to slow (economic) growth," said Adam Sarhan, CEO of 50 Park Investments in New York. "And when you have a slowdown in economic conditions, it's a situation where banks specifically make less money because fewer goods and services are traveling through the economy."
According to preliminary data, the S&P 500 .SPX lost 71.04 points, or 1.21%, to end at 5,778.68 points, while the Nasdaq Composite .IXIC lost 67.12 points, or 0.37%, to 18,283.07. The Dow Jones Industrial Average .DJI fell 673.34 points, or 1.56%, to 42,517.90.
Car makers Ford F.N and General Motors GM.N, which have vast supply chains across North America, fell. The domestically focused Russell 2000 index .RUT dropped.
Wall Street is really concerned, McMillan said. "The likelihood of tariffs will lead to higher prices and therefore lower spending."
Target TGT.N fell after the retailer forecast full-year comparable sales below estimates.
Best Buy BBY.N slumped after the electronics retailer issued a downbeat forecast, while Walgreens WBA.O jumped as a report hinted that the pharmacy chain is closing in on a take-private deal by Sycamore Partners.
Trump's trade tariffs takes effect https://reut.rs/4knkYGm
(Reporting by Johann M Cherian and Sukriti Gupta in Bengaluru; Editing by Maju Samuel and Richard Chang)
((johann.mcherian@thomsonreuters.com))
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.