U.S. stock indexes dropped on Tuesday, as investors sifted through economic data and braced for sweeping tariff announcements from the Trump administration.
U.S. manufacturing contracted in March after expanding two consecutive months, while a measure of inflation at the factory gate jumped to the highest level in nearly three years amid rising anxiety over tariffs on imported goods.
A labor report also showed job openings fell to 7.568 million in February.
President Donald Trump is set to unveil “reciprocal tariffs”, aligning U.S. duties with those of other nations on April 2. He said on Sunday the levies will include all countries but specific details were scant.
The specter of economic disruption from the tariffs coupled with aggressive AI investments by tech firms left Wall Street reeling in the first quarter. The benchmark S&P 500 closed the quarter 4.6% lower, marking its most dismal three-month stretch since July 2022.
The Washington Post reported White House aides have drafted a proposal to impose tariffs of around 20% on most imports to the United States.
The formal announcement is slated for 3 pm ET on Wednesday, U.S. Treasury Secretary Scott Bessent told Fox News on Monday.
Wall Street Week Ahead: Wobbly US stocks face test with tariffs, jobs data
“Investors are on the sidelines because it’s impossible to get any kind of clear compass reading on the direction of the economy until these tariffs are finalized,” said Peter Andersen, founder of Andersen Capital Management.
“The market is going to sway back and forth, but with a bias to the negative side, because this is making it very difficult for CEOs of companies to make any kind of estimates.”
At 10:10 a.m. ET, the Dow Jones Industrial Average fell 434.77 points, or 1.03%, to 41,567.33, the S&P 500 lost 40.74 points, or 0.73%, to 5,571.11 and the Nasdaq Composite lost 89.91 points, or 0.52%, to 17,209.09.
Amid concerns that tariffs could hinder economic growth and trigger inflationary pressures, investors have turned to U.S. government bonds and gold as safe havens while shedding domestic equities - particularly the high-flying tech stocks.
Trump has already implemented levies on imported aluminum and steel, along with increased tariffs on goods from China. Higher duties on cars will take effect on Thursday.
Goldman Sachs on Monday raised the probability of a U.S. recession to 35% from 20% and said it expects more U.S. interest rate cuts this year.
Among single stocks, Johnson & Johnson fell 4.9%, dragging the broader healthcare sector to the bottom. A U.S. bankruptcy judge rejected the company’s $10 billion proposal to end tens of thousands of lawsuits alleging its baby powder and other talc products cause ovarian cancer.
Conservative news outlet Newsmax more than doubled in value, following a more than 700% surge in its NYSE debut on Monday.
PVH Corp jumped 17% after the apparel maker’s annual earnings forecast beat analysts’ estimates.
Tesla’s shares gained 1.1% ahead of its first-quarter vehicle deliveries report on Wednesday. Its shares fell about 36% in the three months to March 31.
Declining issues outnumbered advancers for a 1.85-to-1 ratio on the NYSE and a 2.09-to-1 ratio on the Nasdaq.
The S&P 500 posted four new 52-week highs and one new low, while the Nasdaq Composite recorded 15 new highs and 249 new lows.
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