Wall Street extends losses, Dow Jones tumbles over 500 points

US stock indices fell on Tuesday and expanded the losses amid new escalation in the trade war, which threatens a potential recession in the US. 

President Trump said during a Fox News interview that the US is undergoing a transition phase, with return of wealth to the US through trade and economic policies, including tariffs to boost local industry.

In yet another escalation, US President Trump raised tariffs on Canadian steel and aluminum imports by an additional 25% to a total of 50%.

Trump said the decision comes in response to Ontario’s decision to impose 25% taxes on electricity exports to the US.

Trump criticized Canada sharply for its anti-American tariffs scheme as he described it, asserting that the new tariffs on steel and aluminum will be enforced tomorrow.

He especially criticized Canada’s farm tariffs at “250% to 390%” on American dairy products. 

US two-year treasury yields rose 1.6 basis points to 3.912%, while US 10-year treasury yields rose by 3.1 basis points to 4.244%, as 30-year yields rose by 2.6 basis points to 4.564%.

On trading, Dow Jones tumbled 1.2%, or 519 points as of 14:56 GMT to 41,392 points, while S&P 500 slid 0.8%, or 45 points to 5568 points, as NASDAQ gave up 0.4%, or 75 points to 17,393 points.