Wall Street stocks drop on US tariffs on steel and aluminum

• US President Trump slaps 25% tariffs on steel and 10% on aluminum imported from the European Union, Canada and Mexico.
• The European Union, Canada and Mexico are getting ready to impose tariffs on US goods. Markets reacted negatively to the trade war. 

The three main US stock indices dropped on Thursday. The S&P 500 Index lost 0.69% to 2,705.27 while the Dow Jones Industrial Average dropped 1.02% to 24,415.84. The Nasdaq Composite Index fell 0.27% to 7,442.12. 

US President Donald Trump said that he is mposing steel and aluminum trade tariffs from the European Union, Canada and Mexico. The US tariffs will be set at 25% on steel and at 10% on aluminum as they will enter into effect on Friday. The markets reacted negatively to the news as the main US stock indices ended the day in the red. 

The European Union reacted by issuing a list of hundreds of US product which will be subject to trade tariffs by European consumers. Canada which the second biggest trade partner of the US said they would respond with "dollar for dollar" tariffs against US steel and aluminum exports. Meanwhile, Mexico, the third largest US trade partner, said it would impose tariffs on US goods such as flat steel, pork bellies, grapes, apples and cheese.

Over in Italy, it has been reported that the Five-Star Movement and the League are ready for setting up a new government. Giuseppe Conti will be the Prime Minister while eurosceptic Paolo Savona will be Minister for European affairs. Earlier in the week, stock indices worldwide sold-off on fears that Italy’s political crisis could lead to Italy leaving the Eurozone. 

Looking ahead, traders will focus on the Nonfarm Payrolls data on Friday.

Dow Jones daily chart