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The S&P 500 took a sharp hit on Tuesday as newly implemented tariffs rattled investors’ confidence and continued a selloff that has now fully erased the market’s gains since the election of President Donald Trump in November.
Trade war concerns prompted the S&P 500 to drop to an intraday low of 5,732.59 during a widespread market selloff, falling well below its close of 5,929.04 on Nov. 6, the day after the election. The index, after having its worst day of the year on Monday, finished Tuesday with a loss of 1.2%.
“This is the first market day we’ve had in which investors have been saying they’re really afraid of an economic slowdown,” Chris Grisanti, chief market strategist at MAI Capital Management, told Quartz.
Trading was very unusual on Tuesday, with industrials and banks way off.
Other major indices, such as the Nasdaq Composite, shed 0.35%, while the Dow Jones Industrial Average fell 670 points or 1.5% by the end of the day in New York.
Tesla stock drops following a downgrade
Tesla (TSLA-2.74%) stock declined on Tuesday due to rising fears about tariffs among investors — car prices may be driven higher by the duties. The company also has a large presence in China, including a major assembly plant, and so may be vulnerable to retaliation by Beijing.
Additionally, Bank of America (BAC-5.50%) reduced its price target for the stock to $380 from $490 while maintaining a Neutral rating. Morgan Stanley analyst Adam Jonas yesterday had designated Tesla stock as a “Top Pick” in the U.S. automotive sector and raised his price target to $430.
Target and Best Buy CEOs fear tariffs will raise prices
Target’s (TGT-2.66%) stock fell after it said it expects a “meaningful” year-on-year decline in first-quarter profits compared and CEO Brian Cornell warned that the new tariffs may prompt the retailer to increase prices as soon as next week. The company’s fourth-quarter earnings beat Wall Street’s expectations.
Best Buy (BBY-12.19%) stock dropped 12% after company executives warned that the duties could increase the prices of goods it sells and could reduce its comparable sales if they stay in place for a full year. The electronics retailer reported fourth-quarter results that exceeded Wall Street’s expectations.
Chipotle depends on Mexican avocados
Chipotle (CMG-1.79%) shares declined due to concerns about the restaurant chain’s dependence on avocados that are 50% sourced from Mexico. The company has said its diverse supply chain could help it withstand the tariffs.
— Francisco Velasquez and Josh Fellman contributed to this article.