Summarize this content to 2000 words in 6 paragraphs Stocks fell Tuesday amid renewed fears of a wider trade war as tariffs long threatened by the Trump administration came into effect. The S&P 500 fell 1.2%, nearly erasing all the gains it has accrued since Donald Trump was declared winner of the 2024 presidential election in November.The second-straight day of heavy selling came as Trump made good on threats to impose sweeping tariffs on Canada, China, and Mexico. In response, Canada imposed 25% tariffs on more than $100 billion worth of U.S. items, while China slapped 20% duties on U.S. agricultural items. Mexico said it would announce its response Sunday. Some $3 trillion in value has now been wiped out since Nov. 6, the day after the election was held, according to data from Bloomberg. Other major indexes fell in tandem: The tech-heavy Nasdaq Composite declined 0.3% — edging closer to correction territory, meaning it is close to being 10% lower than its last high; while the blue-chip Dow Jones Industrial Average fell 1.5%. A short-lived rally fizzled as selling intensified into the 4 p.m. market close.The biggest losers included automakers like GM and Ford, both of whom have significant manufacturing facilities in Mexico. Chipotle, which sources about half of its avocados from Mexico, slipped more than 2%.Target and Best Buy were also down. Earlier Tuesday, the CEOs of both those companies warned prices for goods on their respective shelves would likely increase as a result of the new tariff measures. Other major firms seeing significant declines included United Airlines, Royal Caribbean Cruises, Citigroup and Dollar Tree. Separately, Tesla saw major declines following a report that its China-made EV fell to their lowest level since August 2022. The stock is down some 30% year to date. The sell-off comes amid other signs of a softening economy. A closely watched report of monthly manufacturing activity flashed warning signals in its latest measure, while consumer confidence indexes show Americans turning more cautious about their finances. Traders are now counting on three separate rate cuts from the Federal Reserve this year in response to the recent softening. “Inflation expectations are up. People are nervous and uncertain about growth,” Moody’s Analytics Chief Economist Mark Zandi told CNBC. “Directionally, we’re moving toward stagflation, but we’re not going to get anywhere close to the stagflation we had in the ’70s and the ’80s because the Fed won’t allow it.”Wednesday could be another eventful day in the markets. Trump is set to address Congress on Tuesday night, and, in an appearance on Fox Business, Commerce Secretary Howard Lutnick suggested a potential compromise announcement from Trump on the Canada and Mexico duties could come Wednesday.”I think he’s going to figure out you do more, and I’ll meet you in the middle some way, and we’re going to probably be announcing that tomorrow,” he said Tuesday afternoon. “So somewhere in the middle will likely be the outcome the president moving with the Canadians and Mexicans, but not all the way.”
