Major stock indexes plunged Thursday afternoon after President Donald Trump's announcement that he was imposing a 25 percent tariff on imported steel and 10 percent on aluminum.
Investor concern about the news rattled the Dow Jones industrial average, which closed down 420.22 points, or 1.7 percent, at 24,608.98. The Standard & Poor's 500-stock index and tech-heavy Nasdaq both finished down about 1.3 percent.
The Dow is down 1,100 points over the past three days. That is a three-day decline of 4.3 percent. The Standard & Poor's 500 index dropped 3.67 percent over the same three days, or about 102 points.
On Thursday, the S&P 500 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.
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The Nasdaq composite fell 92.45, or 1.3 percent, to 7,180.56. It is still up a healthy 4 percent so far in 2018.
Thursday began with positive news. Initial U.S. jobless claims fell by 10,000 to 210,000 in the seven days ending Saturday, far better than expectations. The rate of layoffs as measured by jobless claims is the lowest level since 1969. The Institute for Supply Management reported Thursday that its key index, the closely watched PMI, rose to 60.8 percent, the highest reading since May 2004. A reading above 50 percent indicates economic expansion.
But the tariff announcement stamped out the feel-good start to the day, at one point pushing the Dow down 586 points.
Even with the pullback from those depths, the 30-stock, Dow blue chip index is now in negative territory for 2018.
"Traders are, again, focused on talk of tariffs while investors are focused on earnings growth, continuing low inflation and highly accommodative interest rates," said Daniel Wiener, chief executive officer of Adviser Investments, a Newton, Mass.-based firm that manages more than $5 billion in assets. "Volatility is back, but that shouldn't sway investors from their longer-range objectives."
The Dow was already reeling from a 380-point decline on Wednesday on fears of continued interest-rate increases by the Federal Reserve. New Fed Chairman Jerome Powell spoke this week before Congress, where he left open the possibility of four rate rises this year instead of three.
Volatility has returned to markets with a vengeance. The Dow and S&P sank 10 percent into correction territory in early February on a positive Labor Department report on wages that inflamed Wall Street's fears of inflation and coming rate increases.
When February ended on Wednesday with another seesaw day, the Dow and S&P were down. The negative month broke 10 consecutive months of gains, which is the most since 1959.
If Trump carries through on his tariffs, some investors expect more down months -- or at least continued volatility.
"If the tariffs are instituted, you won't have to worry about [the Fed] and extra rate hikes this year," said Jamie Cox of Harris Financial Group in Richmond, Va. "The damage to consumption and manufacturing will slow the economy so dramatically that we may be talking about rate cuts" instead of increases.
The hardest-hit sectors on Thursday were energy, utilities, real estate and technology, which were all down 10 percent, considered to be a correction.
Business on 03/02/2018