Wall Street closed in red this Tuesday after imposing the Government of Donald Trump the promised tariffs of 25% to Mexico and Canada, plus an additional 10% to China, which have already carried some reprisals, giving rise to a commercial war.
At the close of the session, the Dow Jones de Industriales dropped 1.55% to 42,520 points, the S&P 500 yielded 1.22% to 5,778 units, and the Nasdaq lost 0.35% to 18,285 integers.
25% tariffs on imports from Mexico and Canada, along with duplicate levies to Chinese products, entered into force on Tuesday.
China and Canada took reprisals, while President Claudia Sheinbaum promised to respond in the same way, without giving details.
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“The assessments of the shares have been very high and there have been alert signs throughout the horizon due to the measures to cut government spending,” said Ben McMillan, IDX Investment Director of Idx Insights in Tampa, Florida. “Now, in addition to that, we have all this rhetoric around tariffs.”
Wall Street is really worried, said McMillan. “The probability of tariffs will lead to higher prices and, therefore, to a lower expense.”
The sector with the greatest losses was, by far, the financial (-3.54%), dragged by the great bench: Bank of America (-6.32%), Citigroup (-6.30%), Wells Fargo (-4.84%) and JPMorgan Chase (-3.99%), Goldman Sachs (-4.02%) and Morgan Stanley (-5.5.75%).
Meanwhile, the CBOE market volatility index rose 0.70% to its highest level from December 20.
“The fear here is that the growth (economic) will slow down,” said Adam Sarhan, executive director of 50 Park Investments in New York.
“And when there is a slowdown in economic conditions, it is a situation in which banks earn less money because they circulate less goods and services for the economy,” he added.
Ford and General Motors cars manufacturers, who have large supply chains in North America, went back. The Russell 2000 index, focused on the national market, went down. General Motors lost 4.56%, Tesla 4.47%and Ford 2.88%.
Two great retailers in the country, Target (supermarkets) and Bestbuy (appliances) warned that the commercial war will affect their results and, for now, admitted that it will result in an increase in costs that will end up impacting consumer prices.
The industrial sector (-1.96%) and essential goods (-1.78%) were also resented, while the technological ended with a slight gain (0.01%).
Among the 30 quoted of Dow Jones, in line with that configuration, the falls of the Boeing industrialists (-6.45%) and 3M (4.81%) highlighted and the technological nvidia (1.69%) or IBM (1.21%) were afraid.
In other markets, Texas oil (WTI) dropped to $ 68.26 a barrel, one day after the OPEC+ alliance said that production will increase from April, and also pressed by the US trade war.
Meanwhile, the 10 -year bonus yield rebounded to 4.25 %, the gold amounted to $ 2,926 and the euro was changed to $ 1,0619.
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With information from Reuters and EFE
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