NEW YORK — The U.S. stock market is sinking further Tuesday after President Donald Trump raised the stakes in his trade war, pulling Wall Street more than 9% below its record set just a month ago.

The S&P 500 was down 0.9% in midday trading after Trump said he would raise tariffs on steel and aluminum coming from Canada, doubling their planned increase to 50%. The president said it was in direct response to moves Canada made after Trump began threatening tariffs on one of the country’s most important business partners.

The Dow Jones Industrial Average was down 554 points, or 1.3%, as of 11 a.m. Eastern time, and the Nasdaq composite was 0.5% lower.

Market Volatility Continues

The drops extend a sell-off on Wall Street that has taken investors on a scary ride, fueled by worries about how much pain Trump will allow the economy to endure through tariffs and other policies intended to remake the country and world. The S&P 500 has swung by at least 1%, up or down, seven times in the last eight days.

“The only thing that makes sense is for Canada to become our cherished Fifty First State,” Trump said. “This would make all Tariffs, and everything else, totally disappear.”

Tuesday’s drops also followed more warning signals flashing about the economy as Trump’s on -and- off -again rollout of tariffs has created confusion and pessimism for U.S. households and businesses. The fear is that the whipsaw moves will either hurt the economy directly or create enough uncertainty to drive U.S. companies and consumers into an economy-freezing paralysis.

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Airlines Feel the Impact

Delta Air Lines said late Monday that it’s already seeing the change in confidence, which is affecting demand for close-in bookings for its flights. That pushed it to roughly halve its forecast for revenue growth in the first three months of 2025, down to a range of 3% to 4% from a range of 7% to 9%.

Delta’s stock lost 8.5%.

Southwest Airlines also cut its forecast for an important underlying revenue trend, and it pointed specifically to less government travel, among other reasons, including wildfires in California and “softness in bookings and demand trends as the macro environment has weakened.”

Its stock nevertheless rallied 5.6%, though, after the airline said it would soon begin charging some passengers to check bags and announced changes to encourage its most loyal customers.

Tech Stocks Show Mixed Results

Oracle dropped 56% after the technology giant reported profit and revenue for the latest quarter that fell short of analysts’ expectations.

Helping to keep the market’s losses from being even worse were several Big Tech stocks, which steadied a bit after getting walloped in recent months. Elon Musk’s Tesla rose 1.7%, for example, after Trump said he would buy a Tesla in a show of support for “Elon’s ‘baby.'”

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Tesla’s sales and brand have been under pressure as Musk has led efforts in Washington to cut spending by the federal government. Tesla’s stock is down more than 44% for the young year so far.

Other Big Tech superstars, which had led the market to record after record in recent years, also held a bit firmer. Nvidia added 0.2% to trim its loss for the year so far to 20.2%. It’s struggled as the market’s sell-off has particularly hit stocks seen as getting too expensive in Wall Street’s frenzy around artificial-intelligence technology.

In stock markets abroad, indexes were mostly lower across Europe and Asia.

Stocks rose 0.4% in Shanghai and were nearly unchanged in Hong Kong as China’s annual national congress wrapped up its annual session with some measures to help boost the slowing economy.

In the bond market, Treasury yields held a bit steadier after tumbling in recent months on worries about the U.S. economy. The yield on the 10-year Treasury slipped to 4.21% from 4.22% late Monday. In January, it was nearing 4.80%.