By Sinéad Carew and Alun John
NEW YORK/LONDON (Reuters) -Ukraine’s acceptance of a U.S. proposal for a ceasefire with Russia briefly pushed the euro to a five-month high while equities fell in Tuesday’s choppy session as investors worried about a lack of clarity on tariffs.
The euro added to earlier gains and European stock futures pared some losses after Ukraine agreed to an immediate 30-day ceasefire during talks with U.S. officials in Saudi Arabia. However, Russia has not yet responded to the proposal.
While the Ukraine news helped U.S. stock indexes end Tuesday well above their session lows, traders were having to make decisions amid dizzying changes on trade.
Earlier on Tuesday, President Donald Trump added to economic jitters by saying he told his commerce secretary to add an additional 25% tariff on all steel and aluminum imports from Canada, bringing the total tariff on those products to 50%.
But the U.S. appeared to have reversed that decision by late afternoon after the premier of Canada’s Ontario province said he was suspending plans to impose a 25% surcharge on electricity exports to the United States and would fly to Washington this week for talks with the Trump administration.
“Uncertainty and volatility continue in this market,” said Mona Mahajan, head of investment strategy at Edward Jones, pointing to tariff announcements and resulting economic concerns.
“Economic growth had started to slow even before the tariff uncertainty in the U.S. That is not uncommon in the first quarter of the year, but what is uncommon is adding to that with uncertainty around policy.”
On Monday, the S&P 500 had suffered its biggest one-day drop this year after Trump, in a weekend Fox News interview, declined to rule out a recession resulting from his trade policies.
Adding to concerns, Tuesday’s data showed U.S. small-business confidence dropped for a third straight month in February, wiping away much of the gains notched after Trump’s November election victory.
Investors were also anxiously awaiting the latest information on inflation conditions from the U.S. consumer price index reading for February, due on Wednesday.
A high reading would add to last month’s hotter-than-expected data, which included the biggest monthly price gain since August 2023.
After a choppy session, in which it briefly went 10% below its latest record-high close, the S&P 500 closed down 42.49 points, or 0.76%, at 5,572.07 while the Nasdaq Composite finished off 32.23 points, or 0.18%, at 17,436.10.
The Dow Jones Industrial Average lost 478.23 points, or 1.14%, to close at 41,433.48.