Stocks sink again, as Trump's tariff policies spark chaos

President Donald Trump has long cared about the stock market, boasting about its performance during his first term and promising investors many more business-friendly policies during his second.

But now he appears to have other priorities. On Tuesday, Trump briefly doubled down on his steep, and chaotically implemented new tariffs, despite the mounting alarm they are causing on Wall Street and beyond.

In a post on his Truth Social network, Trump said the U.S. will impose an additional 25% tariff on steel and aluminum from Canada, raising the tax to 50% overall. But he later reversed the increase after Ontario's premier, Doug Ford, backed off from implementing a tax on electricity exports to the U.S. that had sparked Trump's anger.

Still, Trump said he would go ahead with a 25% tariff on steel and aluminum imports scheduled to go into effect at midnight that will also hit Canada.

U.S. stocks sank again Tuesday, a day after the market had its worst day of the year. The Dow fell another 478 points, or 1.1%. The S&P 500 fell nearly 0.8%, and the Nasdaq declined nearly 0.2%.

Investors and economists are increasingly worried about the tariffs' impact on the U.S. economy — and the possibility that they could spark a recession. That possibility will grow as businesses react to the ongoing market turmoil, financial experts warn.

"In some ways it's a self-fulfilling prophecy," says Peter Ricchiuti, a finance professor at Tulane University (who is also a board member of NPR member station WWNO in New Orleans).

"If you think a recession is coming, then you stop capital expenditures, you don't hire as many people, and then you work yourself into a recession," he says.

Trump digs in

Yet Trump appears committed to his new tariffs, despite widespread concerns that they will hike prices for consumers and businesses, fuel inflation and exacerbate a global trade war.

In a Fox News interview aired Sunday, the president declined to rule out the possibility of a recession. Instead, he said that investors should expect "a period of transition" for the economy.

"We're bringing wealth back to America. That's a big thing. And there are always periods [where] it takes a little time," Trump told Fox News.

That spooked investors. By the end of Monday, the U.S. market had lost $4 trillion in value — erasing all of its gains since Trump won the November election. Yet by that evening, the White House downplayed Wall Street's concerns.

"President Trump delivered historic job, wage, and investment growth in his first term, and is set to do so again in his second term," White House spokesperson Kush Desai said in a statement Monday.

Some of the largest U.S. companies are starting to see all the economic uncertainty cutting into their business — although their leaders were pretty optimistic going into Trump's second term. As recently as last month, CEO confidence hit a three-year high, according to the Conference Board.

But retailers have warned that Trump's new tariffs will increase their costs — and those of consumers. Now major U.S. airlines are also raising the alarm about the mounting economic uncertainty. On Monday, Delta Air Lines cut its forecast, citing a "reduction in consumer and corporate confidence caused by increased macro uncertainty." On Tuesday, American Airlines and Southwest followed suit.

Some CEOs will get an opportunity to hear from Trump directly, and perhaps air their concerns about tariffs, on Tuesday afternoon. He is scheduled to address the Business Roundtable, an influential organization of the country's largest companies.

Copyright 2025 NPR