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Dow falls 420 points after Donald Trump announces steel and aluminum tariffs

Click to play video: 'White House comments on tariff announcement as Dow Jones plummets' White House comments on tariff announcement as Dow Jones plummets
White House Press Secretary Sarah Huckabee Sanders was asked for comment following news that the Trump administration will impose tariffs on steel and aluminum imports - and the resulting drop in the Dow Jones that announcement caused – Mar 1, 2018

Canada’s main stock index fell moderately as stocks south of the border dropped sharply amid talk of tariffs on steel and aluminum by U.S. President Donald Trump.

The president told industry executives Thursday he would impose a tariff of 25 per cent on imported steel and 10 per cent on aluminum, sparking fears the move will lead to other countries putting up trade barriers that will hurt the global economy. The head of the European Commission said the region would respond in kind.

READ MORE: Trump’s tariff announcement leaves Canadian steel, aluminum producers in limbo

Click to play video: 'Trump says tariffs to be imposed on steel, aluminum imports' Trump says tariffs to be imposed on steel, aluminum imports
Trump says tariffs to be imposed on steel, aluminum imports – Mar 1, 2018

“Everyone’s afraid of these protection-type of events, like this announcement, that can only lead to a trade war with other countries,” said Allan Small, a senior investment adviser at HollisWealth.

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“You start putting tariffs on stuff you’re importing into your country, the prices are going up and obviously you have higher inflation, you have higher interest rates. And so I think that’s what the market has been fearing for a while now.”

In New York, the Dow Jones industrial average was down 420.22 points to 24,608.98. The S&P 500 index was down 36.16 points to 2,677.67 and the Nasdaq composite index was down 92.45 points to 7,180.56.

U.S. stocks had been higher earlier in the day after Federal Reserve chairman Jerome Powell testified before Congress that he does not see inflation in workers’ wages “at a point of acceleration,” easing trading anxieties following his comments earlier in the week many interpreted as a signal the Fed may raise rates more quickly than expected to beat down inflation.

READ MORE: Dow Jones saw largest point drop in history on Feb. 5 — here’s what happened

In Canada, the S&P/TSX composite index was down 48.73 points to 15,393.95 in a largely broad-based decline. Gains in the health-care sector which include the volatile marijuana stocks helped lessen downward pressure on the TSX as did strong earnings from Toronto-Dominion Bank.

Shares of TD were up 92 cents, or 1.24 per cent, to $74.92 after its first-quarter profits beat market expectations, despite a hefty charge due to U.S. tax reform, to close out another strong earnings season for Canada’s biggest lenders.

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In currency markets, the Canadian dollar closed at an average trading value of 77.81 cents US, down 0.26 of a U.S. cent. The loonie is almost down two cents against the U.S. dollar since Feb. 16.

On the commodities front, the April crude contract was down 65 cents to US$60.99 per barrel and the April natural gas contract was up three cents at US$2.70 per mmBTU.

The April gold contract was down US$12.70 to US$1,305.20 an ounce and the May copper contract was down one cent to US$3.12 a pound.

WATCH: Liberals say Trump tariffs on steel, aluminum ‘unacceptable’

Click to play video: 'Liberals say Trump tariffs on steel, aluminum ‘unacceptable’' Liberals say Trump tariffs on steel, aluminum ‘unacceptable’
Liberals say Trump tariffs on steel, aluminum ‘unacceptable’ – Mar 1, 2018

*with a file from the Associated Press

 

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