NEW YORK, New York - U.S. stocks dived, then partially recovered Tuesday as 25 percent import duties on goods from Canada and Mexico were imposed from midnight Tuesday. Tariffs on Chinese manufactured goods were doubled to 20 percent.

Canada, Mexico and China all vowed to introduce their own tariffs, to which U.S. President Donald Trump said would result in U.S. tariffs being increased.

"We tend to believe these are more of a negotiation tactic and not the start of a long and drawn out reciprocal trade war," Clark Geranen, chief market strategist at CalBay Investments told CNBC Tuesday. "Still, in these situations, investors sell first and ask questions later."

After the morning's volatility, stocks settled down to a degree in afternoon trading. The Nasdaq Composite shot into the black for a while before caving in again, while industrial indexes clawed back some losses, but joined its tech counterpart by finishing well in the red. 

Following are the closing quotes for the major U.S. stock indices on Tuesday:

• S&P 500: The S&P 500 index fell by 71.57 points or 1.22 percent, closing at 5,778.15. This decline affected nearly every sector within the benchmark index.

• Dow Jones Industrial Average: The Dow Jones Industrial Average dropped 670.25 points or 1.55 percent, ending the session at 42,520.99.

• NASDAQ Composite: The technology-heavy NASDAQ Composite decreased 65.03 points or 0.35 percent, closing at 18,285.16.

U.S. dollar dives as trade tariffs take effect

The foreign exchange markets on Tuesday saw a significant sell-off in the U.S. dollar, following the implementation of U.S. tariffs on major trading partners, including Canada, Mexico, and China.

These trade measures have raised concerns about the U.S. dollar's traditional role as a safe-haven currency, leading to significant movements across various currency pairs.

Key Currency Movements:

• EUR/USD (Euro/US Dollar): The euro strengthened against the U.S. dollar, rising by 1.19 percent to close at 1.0610. Analysts attribute this surge to a combination of factors, including increased European defense spending and a weakening U.S. dollar amidst trade tensions.

• USD/JPY (US Dollar/Japanese Yen): The U.S. dollar depreciated against the Japanese yen, declining by 0.23 percent to 149.14. This movement reflects investors' shift towards traditional safe-haven assets like the yen in response to escalating trade uncertainties.

• USD/CAD (US Dollar/Canadian Dollar): The U.S. dollar edged lower against the Canadian dollar, slipping by 0.07 percent to 1.4472. This slight movement comes amid new U.S. tariffs on Canadian imports and Canada's retaliatory measures, which have introduced volatility to the currency pair.

• GBP/USD (British Pound/US Dollar): The British pound appreciated against the U.S. dollar, gaining 0.68 percent to reach 1.2786. The pound's strength is partly due to a weakening dollar and positive sentiment surrounding the UK's economic resilience in the face of global trade tensions.

• USD/CHF (US Dollar/Swiss Franc): The U.S. dollar fell against the Swiss franc, decreasing by 0.90 percent to 0.8885. The Swiss franc, often considered a safe-haven currency, benefited from investors seeking stability amid escalating trade disputes.

• AUD/USD (Australian Dollar/US Dollar): The Australian dollar rose against the U.S. dollar, climbing 0.46 percent to 0.6252. This uptick reflects a broader trend of U.S. dollar weakening, despite Australia's economic exposure to Chinese markets, which are also affected by U.S. tariffs.

The recent U.S. tariffs have introduced significant volatility into the foreign exchange markets, challenging the U.S. dollar's traditional safe-haven status. 

Global stock markets reel as U.S. trade war heats up

On Tuesday global stock markets experienced significant declines, largely attributed to escalating trade tensions following the implementation of new U.S. tariffs on major trading partners. President Donald Trump's administration imposed a 25 percent tariff on imports from Canada and Mexico, along with an additional 10 percent levy on Chinese goods. These measures have heightened fears of a global economic slowdown, leading to widespread sell-offs across major indices.

Canadian Markets:

• S&P/TSX Composite Index: Canada's main stock index, the S&P/TSX Composite, declined by 1.72 percent, ending the day at 24,572.00. This drop reflects investor concerns over the potential economic impact of the new U.S. tariffs on Canadian exports.

UK and European Markets:

• FTSE 100 (United Kingdom): The index fell by 112.31 points, closing at 8,759.00, a decrease of 1.27 percent.

• DAX (Germany): Germany's DAX index experienced a sharp decline, dropping 820.21 points to close at 22,326.81, marking a 3.54 percent decrease.

• CAC 40 (France): The French CAC 40 index decreased by 151.79 points, ending the day at 8,047.92, down 1.85 percent.

• EURO STOXX 50: This leading blue-chip index for the Eurozone declined by 153.38 points, closing at 5,387.31, a drop of 2.77 percent.

• Euronext 100: The Euronext 100 index fell by 35.59 points to 1,568.58, a decrease of 2.22 percent.

• BEL 20 (Belgium): Belgium's BEL 20 index saw a reduction of 45.64 points, closing at 4,424.01, down 1.02 percent.

Asian Markets:

• Hang Seng Index (Hong Kong): The Hang Seng Index decreased by 64.50 points, ending at 22,941.77, a decline of 0.28 percent.

• SSE Composite Index (China): China's SSE Composite Index bucked the global trend, rising by 7.28 points to 3,324.21, an increase of 0.22 percent.

• Nikkei 225 (Japan): Japan's Nikkei 225 index fell by 454.29 points, closing at 37,331.18, down 1.20 percent.

• STI Index (Singapore): Singapore's STI Index fell by 18.16 points to 3,890.76, marking a 0.46 percent decrease.

• S&P BSE SENSEX (India): India's SENSEX fell by 96.01 points, closing at 72,989.93, down 0.13 percent.

• FTSE Bursa Malaysia KLCI: The Malaysian KLCI index decreased by 15.73 points to 1,555.66, a decline of 1.00 percent.

• KOSPI Composite Index (South Korea): The KOSPI index saw a minor decrease of 3.86 points, ending at 2,528.92, a decline of 0.15 percent.

• TWSE Capitalization Weighted Stock Index (Taiwan): Taiwan's TWSE index dropped 159.37 points to 22,596.88, down 0.70 percent.

Oceania

• ALL ORDINARIES (Australia): The All Ordinaries index declined by 57.90 points to 8,420.90, a decrease of 0.68 percent.

• S&P/ASX 200 (Australia): The Australian S&P/ASX 200 index dropped 47.60 points, closing at 8,198.10, down 0.58 percent.

• S&P/NZX 50 Index Gross (New Zealand): New Zealand's NZX 50 index fell by 80.34 points, closing at 12,469.71, down 0.64 percent.

Middle East Markets

• TA-125 (Israel): The TA-125 index declined by 53.82 points, closing at 2,511.14, a decrease of 2.10 percent.

• EGX 30 Price Return Index (Egypt): Egypt's EGX 30 index fell by 225.70 points to 30,762.80, down 0.73 percent.

Africa

• Top 40 USD Net TRI Index (South Africa): The South African Top 40 USD Net TRI Index decreased by 44.52 points, closing at 4,595.82, a decline of 0.96 percent.

• Australian Dollar Currency Index: The Australian Dollar Currency Index increased by 0.27 points, closing at 62.49, up 0.43 percent.

The implementation of these tariffs has introduced significant volatility into global markets, with investors concerned about the potential for a prolonged trade war and its impact on global economic growth. Market participants are advised to monitor developments closely as the situation evolves.

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