New US tariffs, including a 104% tax on Chinese imports, were enacted Tuesday.
Asian stocks fell again after that.
The higher tariffs went into effect after midnight Eastern Time, as investors were still deciding how to react to President Donald Trump's trade policies.
The S&P 500 fell 1.6% on Tuesday, wiping out a 4.1% gain earlier. It is now 19% below its record high set in February. The Dow Jones Industrial Average fell 0.8% and the Nasdaq Composite fell 2.1%.
There is still a lot of uncertainty about what steps President Trump will take regarding his trade policy.
Financial markets are expected to see further volatility, given uncertainty about how long Trump will keep tough import tariffs in place. These tariffs will raise prices for US consumers and slow the economy. If they remain in place for too long, economists and investors predict a recession. However, if Trump can negotiate a relatively quick reduction in tariffs, he could avoid the worst-case scenario.
