Most of Wall Street sinks, but Tesla and other recent losers bounce back to soften the blow

By STAN CHOE, AP Business Writer

NEW YORK (AP) — Most U.S. stocks are falling Tuesday following President Donald Trump’s latest escalation in his trade war, pulling Wall Street 9% below its record set just a month ago.

The S&P 500 was down 0.6% in midday trading after Trump said he would raise tariffs on steel and aluminum coming from Canada, doubling their planned increase to 50%. The president said it was a response to moves Canada made after Trump began threatening tariffs on one of the country’s most important business partners.

The Dow Jones Industrial Average was down 443 points, or 1.1%, as of 11:30 a.m. Eastern time. The majority of stocks on Wall Street were falling, but gains for a handful of highly influential Big Tech stocks muted the impact, and the Nasdaq composite was basically flat.

Stocks careened following Trump’s announcement, with the S&P 500 going from an early, modest gain to a sharp loss of 1.2% before paring back. Such knee-jerk moves are becoming routine following a sell-off that has taken investors on a scary ride. The S&P 500 has swung by at least 1%, up or down, seven times in the last eight days as worries build about how much pain Trump will allow the economy to endure through tariffs and other policies in order to remake the country and world.

“The only thing that makes sense is for Canada to become our cherished Fifty First State,” Trump said. “This would make all Tariffs, and everything else, totally disappear.”

Tuesday’s drops also followed more warning signals flashing about the economy as Trump’s on -and- off -again rollout of tariffs creates confusion and pessimism for U.S. households and businesses.

Such tariffs can hurt the economy directly by raising prices for U.S. consumers and gumming up global trade. But even if they end up being smaller than feared, all the whipsaw moves could still create enough uncertainty on their own to drive U.S. companies and consumers into an economy-freezing paralysis.

Delta Air Lines said late Monday that it’s already seeing a change in confidence among customers, which is affecting demand for close-in bookings for its flights. That pushed the airline to roughly halve its forecast for revenue growth in the first three months of 2025, down to a range of 3% to 4% from a range of 7% to 9%.

Delta’s stock lost 7.1%.

Southwest Airlines also cut its forecast for an important underlying revenue trend, and it pointed specifically to less government travel, among other reasons, including wildfires in California and “softness in bookings and demand trends as the macro environment has weakened.”

Its stock nevertheless rallied 7.5%, though, after the airline said it would soon begin charging some passengers to check bags and announced changes to encourage its most loyal customers.

Oracle dropped 4.6% after the technology giant reported profit and revenue for the latest quarter that fell short of analysts’ expectations.

Helping to keep the market’s losses in check were several Big Tech stocks, which steadied a bit after getting walloped in recent months. Elon Musk’s Tesla rose 3.4%, for example, after Trump said he would buy a Tesla in a show of support for “Elon’s ‘baby.’”

Tesla’s sales and brand have been under pressure as Musk has led efforts in Washington to cut spending by the federal government. Tesla’s stock is down 43% for the young year so far.

Other Big Tech superstars, which had led the market to record after record in recent years, also held a bit firmer. Nvidia added 2.2% to trim its loss for the year so far below 19%. It’s struggled as the market’s sell-off has particularly hit stocks seen as getting too expensive in Wall Street’s frenzy around artificial-intelligence technology.

In stock markets abroad, indexes mostly fell across Europe and Asia.

Stocks rose 0.4% in Shanghai and were nearly unchanged in Hong Kong as China’s annual national congress wrapped up its annual session with some measures to help boost the slowing economy.

In the bond market, Treasury yields held a bit steadier after tumbling in recent months on worries about the U.S. economy. The yield on the 10-year Treasury rose to 4.26% from 4.22% late Monday. In January, it was nearing 4.80%.

A report released Tuesday morning showed that U.S. employers were advertising 7.7 million job openings at the end of January, exactly as economists expected. It’s the latest signal that the U.S. job market remains relatively solid overall, for now at least, after the economy closed last year running at a healthy pace.

AP Business Writers Yuri Kageyama and Matt Ott contributed.