Rout restarts on Wall Street amid Trump's additional tariffs on Canada; Nasdaq slips into red, Dow drops 1%

The tech-heavy Nasdaq Composite reversed early gains and slipped into the red.

Wall Street stocks reversed course and gave up the partial recovery on March 11 after President Donald Trump placed additional tariffs on Canadian steel and aluminum coming into the US.

Unleashing the fresh wave of tariffs, Trump announced in a Truth Social post, that steel and aluminum tariffs on Canada would double to 50 percent from the current 25 percent starting Wednesday. These latest tariffs intensified recession fears, adding to the concerns of a multi-front global trade war.

With this, the tech-heavy Nasdaq Composite gave up early gains and slipped 0.3 percent by mid-trade. The 30-stock Dow Jones lost 1.3 percent, while the S&P 500 dropped 0.8 percent. The Nasdaq Composite has entered correction territory, falling over 10 percent from its late 2024 peak, while the S&P 500 hovers 9 percent below its February all-time high.

This comes after Wall Street indices logged in losses for three consecutive weeks. In the last session as well, the Nasdaq clocked in its biggest single-day fall since September 2022, dropping 4 percent. The 30-stock Dow, which lost nearly 900 points, closed below its 200-day moving average for the first time since November 1 last year.

Meanwhile, bogged down by the market rout, global brokerage firm Citi downgraded its rating for US stocks to 'neutral' as against the previous 'underweight', forecasting near-term weakness. Adding to economic concerns, Delta Air Lines cut its earnings outlook due to weaker US demand, sending its stock down over 8 percent.

The biggest investor concern is that Trump administration tariffs could drive up U.S. prices, forcing the Federal Reserve to maintain higher rates, further slowing economic growth. Further sparking uncertainty, Trump referred to recession fears as "a period of transition" in the US economy.

Meanwhile, a wave of caution also spread in anticipation of key macroeconomic data that is due this week, including the University of Michigan's consumer sentiment reading on Friday. Inflation data takes center stage with the February consumer price index on Wednesday and the producer price index on Thursday.