The stock market erased much of last week’s decline as tariff fears are refocused.
Stocks are declining as traders support the major Fed decision on interest rates, as they fear tariffs will reappear. On Tuesday, May 6th, the Dow Jones lost 404 points (0.98%) at 40,814, with the S&P 500 down 0.84% and the Nasdaq down 1.00%.
Traders were concerned after President Donald Trump made several remarks that suggested there was no chance of tariff relief. Over the weekend, Trump announced 100% tariffs on foreign films, saying he has no plans to talk to Chinese President Xi Jinping this week.
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Additionally, Trump hints at new tariffs on drugs, and will be announced over the next two weeks. He added that it balances consumer costs by reducing the regulatory burden on US drug producers.
Among Tesla’s biggest losers today, with Tesla down 2.46% thanks to continued trouble in Europe. In the UK, consumers registered only 512 new Tesla vehicles in March, down 62% from the previous year. These figures reflect similar declines in Germany, France, Sweden and others.
Tariffs cause record US trade deficits
Recent figures also show that the US trade deficit hit a record high in March, reaching $1400.5 billion. This figure was in $68.6 billion last year in March 2024. The deficit was a response to tariffs.
The US imported record amounts of goods from 10 countries, according to a Commerce Department report on Tuesday. These included Mexico and Vietnam, but not China. In particular, imports from China are at their lowest in five years and will likely fall even further as the 145% tariff rate continues.
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