Dow drops 600 points as Trump escalates trade war with Canada

U.S. stocks caved again on Tuesday as President Trump escalated his trade war with Canada, with the Dow Jones Industrial Average falling 600 points and the S&P 500 approached correction territory.

“The market has been down for three weeks in a row, largely driven by uncertainty about where trade policy lands, full stop. We’ve been inundated with tariff announcements that, unlike the 2018 playbook, are actually being applied universally versus the surgical approach we saw with term 1.0,” Art Hogan, chief market strategist at B. Riley Wealth, told CBS MoneyWatch. “Unless and until we know where the goal posts actually are on trade and tariffs, this uncertainty will continue to weigh on markets.” 

The hardest-hit sectors included energy, materials and industrials. All three sectors fell amid news that Mr. Trump was hiking tariffs on imports of steel and aluminum from Canada to 50% in response to the country’s largest province, Ontario, on Monday announcing a 25% surcharge on electricity exports to the U.S. 

The president also said he would “substantially increase” other tariffs on Canada on April 2 if it does not rescind tariffs on U.S. dairy products and other goods.

In late morning trade, the Dow was off 697 points, or 1.4%, at 41,304. The S&P 500 lost 55 points, or 1%, to 5,559.97, and the Nasdaq Composite shed 123 points, or 0.7%, to 17,322.

—This is a developing story and will be updated.