Stocks dive after Trump promises tariffs on steel

NEW YORK—U.S. stocks dove in another dizzying day of trading after President Donald Trump promised on Thursday to deliver stiff tariffs on imported steel and aluminum, which raised the threat of escalating retaliation by other countries and higher inflation. The Standard & Poor’s 500 index erased nearly all of its gains for the year.

Indexes had been bouncing between modest gains and losses earlier in the day, until Trump told industry executives around midday that they’ll “have protection for the first time in a long while” and that he’s planning to impose tariffs of 25 percent on steel imports and 10 percent on aluminum imports next week.

The Standard & Poor’s 500 index tumbled 36.16 points, or 1.3 percent, to 2,677.67. It’s the third straight day where the index has lost at least 1 percent. It had only four such days last year. The S&P 500 is now up just 0.2 percent for the year after having its best January in 20 years.

The Dow Jones industrial average dropped 420.22 points, or 1.7 percent, to 24,608.98, and the Nasdaq composite fell 92.45, or 1.3 percent, to 7,180.56.

As a candidate, Trump campaigned on an “America First” trade policy, and a big fear for investors has been that increasingly nationalistic governments will impose barriers that hurt the global economy and trade, as well as profits for U.S. exporters. Apple, the most valuable U.S. company, got 63 percent of its sales from outside the United States in its latest fiscal year.

Bond prices rose as demand jumped for safer investments, which pushed yields lower. The yield on the 10-year Treasury note sank to 2.81 percent from 2.86 percent late Wednesday.

Stocks were higher earlier in the day after Federal Reserve Chairman Jerome Powell testified before Congress and appeared to calm one of the market’s main worries: that the Fed may get more aggressive about raising interest rates to beat down inflation amid the strengthening job market and economy.

Earlier in the week, Powell’s testimony helped send Treasury yields jumping and stocks tumbling when he said that he’s feeling more optimistic about the economy. Some traders took that as a signal that the Fed may raise rates more quickly than the market expected.

Worries about potentially higher rates and inflation have reintroduced markets to volatility following their unusually calm run in 2017 and early this year. The concerns at one point helped knock the S&P 500 down 10 percent from its record high, set in late January.

Oil prices continue to drop following a report on Wednesday that showed more crude supplies in inventories last week than analysts expected. Benchmark U.S. crude fell 65 cents to settle at $60.99 per barrel. Brent crude, the international standard, lost 90 cents to $63.83 a barrel.

Natural gas rose 3 cents to $2.70 per 1,000 cubic feet, heating oil fell 2 cents to $1.89 per gallon and wholesale gasoline slipped 3 cents to $1.90 per gallon