US equity indexes slumped as a trade war began between the US and its biggest three trade partners -- Canada, China, and Mexico.

The Nasdaq Composite sank 0.6% to 18,246.9, with the S&P 500 down 1.1% to 5,785.1 and the Dow Jones Industrial Average 1.4% lower at 42,570.6 after midday on Tuesday. All sectors declined intraday.

Most US Treasury yields dropped, with the 2-year slumping 6.4 basis points to 3.92% and the 10-year little changed at 4.18%.

The CBOE's volatility index VIX, also known as the fear gauge, soared 11% to 25.25, its highest since mid-December.

West Texas Intermediate crude oil futures dropped 1.7% to $67.23 a barrel, the lowest level since early December.

The Trump administration imposed 25% tariffs on Canada and Mexico while doubling tariffs on goods from China to 20%. Canada is responding with an initial tranche of retaliatory tariffs on $30 billion of US goods and plans to raise the levies to $155 billion of imports. China imposed 10% to 15% levies on US food and agricultural products while placing export and investment restrictions on 25 US companies.

Mexican President Claudia Sheinbaum is likely to announce her country's plans, with Reuters reporting Sheinbaum saying on Tuesday that her government would respond to the US tariffs but did not immediately provide details.

In company news, Best Buy (BBY) flagged potential price increases amid tariff uncertainties and issued a full-year earnings outlook that fell short of Wall Street estimates at the midpoint. Its shares sank past 14% intraday, the worst performer on the S&P 500.