After the steep fall on Monday, US stock markets stayed under pressure on Tuesday. The day started off on a negative note, as investors reacted to President Trump’s fresh threats of doubling tariff to 50 percent on imports of steel and aluminium from Canada in response to Ontario’s 25 percent tax on electricity exports to the US However markets moderated hours later after a Canadian official said a delegation would head to Washington soon to lower the tension between the two countries. After market hours, Trump also reversed the decision of doubling the tariffs on Canadian metals. Also, markets recovered some ground after news of possible progress in Russia-Ukraine ceasefire talks.
At the end of trade on Tuesday, Dow Jones dropped 1.16 percent, S&P 500 closed down 0.76 percent, and Nasdaq slipped 0.19 percent. Investors have become increasingly cautious as Mr Trump has flip-flopped on tariffs, causing confusion and uncertainty. In addition to fears regarding the impact on economic growth and the possibility of a recession, there are concerns that tariffs could reignite inflation. All eyes are on the consumer price inflation (CPI) report to gauge inflation trends in the US and to analyse the Fed’s interest rate stance going forward. Investors are also contending with the possibility of a government shutdown this week and the impact of additional tariffs by the US scheduled for 2nd April.