US stock markets faced another downturn following President Trump’s announcement of new tariffs on Canadian steel and aluminium. The S&P 500 has dropped by 1.2% today, nearing a 10% decline from its record high on February 18, while the Nasdaq Composite is down almost 15%.
Market observers suggest that a pain threshold will eventually prompt action to resolve the trade war. Delta’s warning about a weakening consumer signals potential challenges ahead, with upcoming US CPI data likely to influence market sentiment. Targets for the S&P 500 include a potential drop to 5119, marking a 16% decline.
Canadian Response To Tariffs
Incoming Canadian Prime Minister Mark Carney stated that his government will respond to the tariffs in a way that minimises impact on Canadian workers while aiming for maximum effect in the US. His administration intends to maintain tariffs until satisfactory trade commitments are made by the United States.
This latest drop in equities follows the White House’s decision to impose new duties on Canadian metals, a move that has rattled already nervous investors. The S&P 500’s steady decline has now brought it within reach of correction territory, with the Nasdaq Composite bearing even heavier losses. As markets react, traders are watching for where broader indices may find their next levels of support.
While some expect policymakers to intervene should losses accelerate, there is no immediate sign of a shift in approach from Washington. Delta’s concerns about consumer weakness add another layer to the current backdrop, with inflation data set to play a critical role in shaping sentiment. Uncertainty about pricing pressures remains high, and any surprises in the latest CPI reading could either stabilise markets or exacerbate selling. The 5119 level for the S&P 500 remains in focus, representing a clear marker for potential further declines.
Market Volatility And Future Outlook
Carney’s remarks indicate that Ottawa will not back down easily. His government appears committed to retaliatory measures, reinforcing the risk of prolonged disruptions for companies reliant on cross-border trade. By targeting industries that hold economic and political sway in the United States, Canada’s response may aim to pressure Washington into negotiations. However, this introduces further unknowns for investors attempting to price in future policy shifts.
With volatility persisting and key data releases ahead, short-term positioning takes on heightened importance. Monitoring technical areas of support could provide indications of temporary relief, but broader risks remain unresolved. Until markets receive clarity on trade developments and economic trends, sharp moves in both directions should be expected.
