US stocks tumbled for a second consecutive session on Tuesday as President Donald Trump’s sweeping tariffs on Canada, Mexico, and China rattled investors, sparking fears of economic fallout. In response to Trump’s tariffs, Canadian Prime Minister Justin Trudeau announced immediate 25% levies on C$30 billion worth of US goods. Meanwhile, Mexico’s President Claudia Sheinbaum confirmed that retaliatory tariffs will be unveiled this weekend, escalating tensions further. The Dow Jones Industrial Average dropped, extending its two-day losses to over 1,300 points, while the S&P 500 and Nasdaq Composite also saw sharp declines. Investors scrambled to assess the impact of retaliatory measures from trading partners, with key sectors such as autos, retail, and technology bearing the brunt of the sell-off. 

Key Takeaways:

  • Dow Extends Steep Sell-Off, Drops 670 Points: The Dow Jones Industrial Average plunged 670.25 points, or 1.55%, to close at 42,520.99, marking its second consecutive session of sharp losses. This decline comes after Monday’s nearly 650-point drop, bringing the two-day total losses to over 1,300 points. At its lowest point during the session, the Dow was down more than 840 points before trimming some losses into the close. The sell-off wiped out all of the index’s gains for 2025, leaving it flat on the year.
  • S&P 500 and Nasdaq Post Heavy Losses as Market Turmoil Continues: The S&P 500 fell 1.22% to 5,778.15, extending its declines after suffering its worst day of the year in Monday’s session. More than 80% of S&P 500 stocks ended the day in the red, as investors rotated out of risk assets amid heightened trade uncertainty. Meanwhile, the Nasdaq Composite dropped 0.35% to close at 18,285.16 after briefly flirting with correction territory earlier in the day. The tech-heavy index, which had been resilient in recent weeks, fell more than 2% at its session low as investors dumped high-growth stocks
  • European Stocks Plunge as Trump’s Trade War Sparks Global Market Rout: European markets suffered their worst day in months as investors braced for the economic impact of Trump’s tariffs on Mexico, Canada, and China. The Stoxx 600 slumped 2.2%, its steepest daily decline since August last year, as auto stocks led the sell-off. The Stoxx 600 autos sector nosedived 5.7% as major carmakers with global supply chains took a hit. Germany’s DAX fell 3.40%, shedding 786 points, while France’s CAC 40 lost 1.95% with a 160-point decline. Italy’s FTSE MIB tumbled 3.31%, dropping 1,294 points. Meanwhile, London’s FTSE 100 underperformed, falling 1.27% with a loss of 112.31 points to close at 8,759.00. 
  • Asian Markets Decline as Tariff Impact Weighs on Sentiment: Japan’s Nikkei 225 dropped 1.20% to close at 37,331.18, leading declines in Asia as investors digested the potential fallout from Trump’s tariffs. The broader Topix index shed 0.71%, settling at 2,710.18. South Korea’s Kospi index slipped 0.15% to 2,528.92, while the small-cap Kosdaq retreated 0.81% to 737.90. In China, Hong Kong’s Hang Seng Index fell 0.16% in its final hour of trade, while mainland China’s CSI 300 closed flat at 3,885.22 as investors monitored Beijing’s response to the escalating trade tensions. Australia’s S&P/ASX 200 dropped 0.58% to 8,198.10 as retail sales data failed to lift sentiment. India’s Nifty 50 and BSE Sensex also traded lower, slipping 0.28% and 0.27%, respectively.
  • US Treasury Yields Tick Higher Amid Market Volatility: The 10-year Treasury yield rose more than 3 basis points to 4.216%, reversing earlier declines as investors weighed the long-term implications of the tariff battle. Meanwhile, the 2-year Treasury yield slid 3 basis points to 3.949% as traders adjusted their expectations for Federal Reserve policy. The rise in long-term yields suggests that markets remain cautious about inflation risks stemming from higher import costs. European bond yields also moved lower, with the 10-year German bund yield slipping 0.6 basis points to 2.485% and the 10-year UK gilt yield falling 4.5 basis points to 4.509%.
  • Oil Prices Slump to Multi-Month Lows as OPEC+ Moves Forward with Output Increase: Brent crude fell 58 cents, or 0.8%, to settle at $71.04 per barrel, after briefly touching a session low of $69.75, its lowest level since September. US West Texas Intermediate (WTI) crude dropped 11 cents, or 0.2%, to close at $68.26, after earlier hitting a session low of $66.77, the weakest level since November. The declines were driven by OPEC+ confirming that it will proceed with an April oil output increase of 138,000 barrels per day, marking the first production boost since 2022. Additional pressure came from Trump’s new tariffs, which analysts warn could dent global energy demand.

FX Today:

  • EUR/USD Climbs as Bulls Extend Rally Above 1.0600: The EUR/USD pair advanced 1.17% on Tuesday to close at 1.0609, marking its strongest session in weeks as buyers pushed the pair above key resistance levels. The Euro gained traction after opening at 1.0486, dipping briefly to 1.0470 before surging to a high of 1.0623. This move confirmed a bullish breakout, with the pair now trading above the 50-day SMA at 1.0393 and approaching the 100-day SMA at 1.0518. If EUR/USD sustains momentum above 1.0600, further upside could target 1.0650, with the 200-day SMA at 1.0722 acting as a longer-term resistance level. On the downside, support is seen at 1.0550, with stronger buying interest expected near the 100-day SMA. A break below 1.0500 would shift the bias back in favour of the bears.
  • GBP/USD Tests 200-Day SMA as Uptrend Gains Strength: The British pound gained 0.68% on Tuesday, lifting GBP/USD to 1.2787 as the pair tested key resistance near the 200-day SMA. Opening at 1.2693, GBP/USD briefly dipped to 1.2678 before climbing to an intraday high of 1.2797, where it met selling pressure. A sustained move above the 1.2800 level would confirm a breakout, with further gains likely toward 1.2850 and 1.2900. On the downside, immediate support lies at 1.2700, with a stronger floor at the 100-day SMA at 1.2631. A break below 1.2630 could shift sentiment lower, exposing the 1.2500 handle.
  • USD/CAD Struggles Near 1.4500 as Canadian Dollar Remains Under Pressure: The Canadian dollar showed little relief on Tuesday, with USD/CAD slipping 0.04% to close at 1.4476. The pair opened at 1.4481, briefly spiked to 1.4542 before reversing to a session low of 1.4405. The movement suggested profit-taking after recent gains, keeping USD/CAD near the 50-day SMA at 1.4434. If the pair holds above 1.4450, another test of the 1.4500 resistance level is likely, with a breakout potentially targeting 1.4600. However, a move below 1.4450 could send USD/CAD lower toward the 100-day SMA at 1.4176, shifting short-term momentum in favor of sellers.
  • USD/MXN Retreats from 21.00 as Mexican Peso Stages Comeback: The Mexican peso rebounded on Tuesday, sending USD/MXN down 0.56% to close at 20.56. The pair surged early in the session, climbing to an overnight high of 20.70 before briefly testing the 21.00 mark, its weakest level in four weeks. However, buyers stepped in, forcing the pair back toward the 20.50 level. If USD/MXN climbs above 20.99 again, it could challenge the year-to-date high of 21.28, with further resistance near last year’s peak of 21.46. On the downside, support sits at 20.50, with the 50-day SMA at 20.48 acting as a key technical level. A break below this could see USD/MXN slide toward the 100-day SMA at 20.32, shifting momentum in favour of the peso.
  • Gold Surges Above $2,910 as Safe-Haven Demand Rises: Gold prices jumped 0.81% on Tuesday, closing at $2,914 as escalating trade tensions fuelled demand for the precious metal. The metal opened at $2,891, dipped to an intraday low of $2,882.05 before rallying to a session high of $2,927. The rebound reaffirmed gold’s bullish trend, with the metal trading above all key moving averages, including the 50-day SMA at $2,781. If gold sustains momentum above $2,910, the next resistance level stands at $2,950.. On the downside, support is seen at $2,880, with stronger buying interest likely around $2,850. A drop below $2,850 could signal a deeper pullback.

Market Movers:

  • Okta Soars on Strong Earnings Beat: Shares of Okta surged 24% after the cloud software company posted fourth-quarter earnings of 78 cents per share on revenue of $682 million, surpassing Wall Street estimates of 74 cents per share and $670 million in revenue.
  • GitLab Gains Despite Weak Full-Year Guidance: GitLab shares jumped 12% following a fourth-quarter earnings and revenue beat, though the company’s full-year earnings forecast came in below analyst expectations, raising concerns about future growth.
  • Best Buy Tumbles as Tariff Fears Mount: Shares of Best Buy plunged 13% as CEO Corie Barry warned that Trump’s new tariffs on China and Mexico would drive up prices for U.S. consumers, with the company sourcing 55% of products from China and 20% from Mexico.
  • Tesla Slumps on Sharp Decline in China Sales: Tesla shares dropped 4% after data from the China Passenger Car Association showed a nearly 50% year-over-year plunge in February sales, with just 30,000 China-made vehicles sold, marking the lowest in over two years.
  • Auto Stocks Slide as Trump Tariffs Take Effect: Shares of General Motors tumbled 5%, while Ford and Stellantis lost 3% and more than 4%, respectively, as analysts warned that the new 25% tariffs on Mexico and Canada could wipe out profits if price hikes are not implemented.

As markets closed on Tuesday, the Dow Jones extended its steep losses, tumbling another 670 points and bringing its two-day decline to over 1,300 points as Trump’s tariffs sent shockwaves through global equities. The S&P 500 and Nasdaq also fell sharply, with auto stocks, retailers, and chipmakers facing significant pressure amid concerns over higher costs and slowing economic growth. European and Asian markets followed suit, with major indices posting steep losses as investors braced for retaliatory measures from Canada, Mexico, and China. Meanwhile, Treasury yields edged higher as traders assessed the long-term implications of the trade war, and oil prices slumped to multi-month lows on concerns over weaker global demand.