Tuesday, August 5, 2025

Wall Street Takes a Hit for the Second Day as Tariff Fears Weigh Heavy

The New York Stock Exchange declined for the second consecutive day on Tuesday as U.S. President Donald Trump threatened to impose additional tariffs on Canadian steel and aluminum. However, most M7 Big Tech stocks bounced back, with Tesla surging 3.8% and Nvidia climbing 1.6%, while Apple and Alphabet remained in the red. / AFP
AFP·Yonhap

After a volatile session, the New York stock market closed in negative territory for the second consecutive day on Tuesday.

The S&P 500 and NASDAQ, which had briefly rebounded in the afternoon, succumbed to selling pressure in the final hours, causing all three major indices to fall for the second straight day.

The Dow Jones Industrial Average had the smallest drop the previous day and saw the largest drop today.

Still cautious after the sharp decline of the previous day, investors continued to sell off stocks as Trump threatened additional tariffs.

Despite a last-minute compromise that caused Trump to withdraw his plans to raise tariffs on Canadian steel and aluminum to 50%, market sentiment remained fragile.

Markets Stumble for Second Day

Contrary to expectations of a rebound following the previous day’s sharp decline, Wall Street failed to break its downward momentum.

The Dow Jones shed 478.23 points (1.14%) to close at 41,433.48, while the S&P 500 fell by 42.49 points (0.75%) to 5,572.07.

The tech-heavy NASDAQ, which had nosedived 4% the previous day, ended the session down 32.22 points (0.18%) at 17,436.10.

The CBOE Volatility Index (VIX), often referred to as Wall Street’s “fear gauge,” eased 0.93 points (3.37%) to 26.92.

Tariff War

Trump continued the trade war on Tuesday.

In a morning post on his social media platform Truth Social, he criticized the Ontario province in Canada for raising electricity prices by 25% for the U.S. He threatened to impose an additional 25% tariff on Canadian steel and aluminum exports to the U.S., increasing the total tariff rate from 25% to 50% starting Wednesday.

Ontario, which had initially threatened to cut power supplies to the U.S. in retaliation, backed down after U.S. Secretary of Commerce Howard Lutnick stepped in to mediate.

Both sides agreed to resume trade talks in Washington on Wednesday. White House trade advisor Peter Navarro later stated that the proposed 50% tariffs on Canadian steel and aluminum would not be implemented.

Tesla Surges, Apple Tumbles

The M7 Big Tech stocks showed mixed results.

Nvidia and Tesla, which had plummeted the previous day, staged a comeback, while Apple continued its downward trend.

Nvidia shares surged nearly 4% during the session. The stock attracted investors looking for a bargain after its price-to-earnings ratio (PER) dropped sharply following the previous day’s 5.1% plunge.

Nvidia’s current PER ratio of 22.9 slightly exceeds the S&P 500 average of 20.3 but remains well below its five-year average of 40. Analysts are bullish on Nvidia, citing its attractive valuation.

Nvidia closed up $1.79 (1.67%) at $108.76, though it gave up some of its earlier gains.

Tesla rebounded after Trump announced on Wednesday morning that he would purchase a Tesla electric vehicle, a show of trust and support for CEO Elon Musk, the head of the Department of Government Efficiency (DOGE).

After plummeting 15% the previous day, Tesla shares soared $8.44 (3.80%) to $230.58. However, the stock remains nearly 52% below its all-time high of $479.86 on December 17, 2024. It has lost 43% year-to-date.

Some analysts caution that Tesla may still be searching for a bottom, warning that bargain hunting could be risky until a clear support level is established.

Amazon gained $2.06 (1.06%) to close at $196.59, while Meta Platforms climbed $7.73 (1.30%) to $605.71.

Microsoft, the second-largest company by market cap, rose $0.29 (0.08%) to $380.45.

In contrast, Apple, the top company by market cap, continued its slide, dropping $6.63 (2.91%) to $220.84. Alphabet also fell by $1.83 (1.10%) to $164.04.

The Roundhill M7 ETF (MAGS), which tracks the M7 stocks, increased $0.18 (0.39%) to $46.51.

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