Investing.com– The S&P 500 closed sharply losses Tuesday, as intraday comeback, led by Nvidia, ran out of steam at time when global trade war concerns persist ahead of a speech by President Donald Trump.
At 4:00 p.m. ET (21:00 GMT), the dropped 669 points, or 1.6%, lower, the index slipped 1.2%, and the fell 0.4%.
Nvidia gives up some gains as tech bounce fades
NVIDIA Corporation (NASDAQ:) gave up some gains to close 1.7% higher as the dip buying in tech faded.
Citi backed Nvidia on Tuesday, suggesting that Nvidia’s investment merits remain intact despite a 13% decline in the stock price following recent earnings.
Other big tech stocks including Alphabet (NASDAQ:), up 2%, also kept broader-market losses in check.
Trump threatens more tariffs
President Donald Trump threatened to retaliatory should Canada retaliate to the president’s 25% import duties on imported Canadian goods that went into effect on Tuesday.
“Please explain to Governor Trudeau, of Canada, that when he puts on a Retaliatory Tariff on the U.S., our Reciprocal Tariff will immediately increase by a like amount!,” Trump said in a post on Truth Social.
Earlier, Canada’s Prime Minister Justin Trudeau had said Ottawa would respond to Trump’s tariffs by introducing its own 25% levy on roughly $20 billion in U.S. goods.
The tariff threats come as 25% on imported goods from Mexico and an additional 10% tariffs on Chinese goods imported to the U.S. also went into effect on Tuesday.
In response, China’s finance ministry said it will impose tariffs of 15% on chicken, wheat, corn, and cotton imports from the U.S., while soybeans, sorghum, pork, beef, fruits and vegetables, aquatic products, and dairy will face a 10% tariff.
Mexican President Claudia Sheinbaum said Tuesday that there is no justification for the new levies on imports from her country, adding she will announce retaliatory tariffs this weekend.
The current S&P 500 earnings estimates might not fully account for the potential risks associated with these tariffs, Citi strategists said in a note.
While a robust fourth-quarter performance set a positive tone for 2025, the strategists caution that the consensus estimates may not have embedded the impacts of tariff policies.
Citi anticipates some downward revisions to the consensus 2025 earnings estimates, traditionally bottoming out in mid-April.
“All told, we suspect most analysts, including us, are in a wait and see mode. That is, we can do sensitivity analysis, but likely require more granularity before building policy effects into base case assumptions,” Citi said.
Trump speech eyed for possible Ukraine clues
Trump is set to deliver his first address Congress later on Tuesday.
The president is expected to lay out the thinking behind his domestic and foreign policy plans.
Earlier on Tuesday, Reuters reported that Trump could announced that he is signing the minerals rights deal with Ukraine during his address
Retailers to report
There are more earnings to digest Tuesday.
Target (NYSE:) stock fell 3% after the big-box retailer unveiled a cautious outlook for sales growth in its current financial year, flagging uncertainty surrounding U.S. President Donald Trump’s trade policy.
Best Buy (NYSE:) stock dropped 13% despite the retailer posting a surprise rise in quarterly comparable sales for the all-important holiday shopping season, as customers took advantage of promotions to snap up high-end appliances and gaming consoles.
Nordstrom (NYSE:) stock rose 0.3% after the department store operator beat expectations for quarterly comparable sales and said its Chief Financial Officer Cathy Smith would step down.
AutoZone (NYSE:) stock closed around the flatline after the auto parts retailer missed estimates for second-quarter revenue, as it navigated headwinds due to consumers holding back and currency rate fluctuations.
(Peter Nurse, Ayushman Ojha contributed to this article.)
