Wall Street experienced another round of losses on Tuesday, as the ongoing trade war between the U.S. and its key trading partners took a toll on global markets. The intensifying conflict has erased all of the post-election gains for the S&P 500, highlighting growing concerns about a potential global economic slowdown.

The U.S. government's decision to impose tariffs on imports from Canada and Mexico, combined with a doubling of tariffs against China, sent shockwaves through the market. In response, all three countries announced retaliatory tariffs, raising fears of an escalating trade dispute that could have a far-reaching impact on the global economy.

The S&P 500 fell by 1.2%, with more than 80% of the stocks in the index ending the day in the red. The Dow Jones Industrial Average fared worse, dropping 1.6%, while the Nasdaq Composite saw a more modest decline of 0.4%. At one point, the Nasdaq briefly entered a correction phase, falling by 10% from its most recent high, a level considered a signal of market adjustment. However, strong performances from major tech stocks like Nvidia and Microsoft helped to mitigate some of the losses.

Among the hardest-hit sectors, financial stocks bore the brunt of the sell-off. JPMorgan Chase dropped 4%, and Bank of America suffered a more significant loss of 6.3%. The sharp decline in financial stocks highlighted the market's sensitivity to trade uncertainties and the potential impact on corporate profits.

The sell-off was not limited to U.S. markets. In Europe, major indices saw sharp declines, with Germany’s DAX falling by 3.5%, primarily due to heavy losses among automakers. Asian markets also saw more modest declines, but the global sentiment remained largely negative, reflecting the broader uncertainty surrounding the trade war.

“The markets are having a tough time even setting expectations for what this trade war could look like,” said analysts. “This is clearly a level step higher than anything we saw during President Trump’s first term.”

The recent downturn in U.S. stocks has effectively wiped out all the market’s gains since President Trump’s election in November. Much of the rally that followed his victory was fueled by optimism about his policies, which were expected to boost the U.S. economy and support corporate growth. However, as the trade war continues to intensify, concerns about rising consumer prices and inflationary pressures are beginning to weigh heavily on both the economy and market sentiment.

The impact of the tariffs is already being felt in various sectors. Retailers like Target and Best Buy have warned that the new trade policies will add pressure to their profit margins. Despite posting better-than-expected earnings, Target saw its stock drop by 3% as it announced that tariffs, along with other rising costs, would create “meaningful pressure” on its profits in the early part of the year.

As the trade war continues to evolve, investors are left grappling with an unpredictable economic landscape. While some sectors, like technology, have been able to weather the storm, many others are facing a more challenging environment. With global markets on edge, the path forward remains uncertain, and the potential for further volatility looms large as the trade dispute rages on.