The S&P 500 (SPX) fell hard today after President Donald Trump hit Canada, Mexico, and China with new tariffs. These place 25% tariffs on exports from Canada and Mexico, as well as an additional 10% on China, which was already dealing with 10% on its exports. The tariffs also put an extra 10% on energy from Canada.
Canada and China have retaliated to President Trump’s tariffs, introducing their own tariffs on the U.S. Canada returned fire with a retaliatory 25% tariff on U.S. goods while China’s new tariffs on the country range from 10% to 15%. This brings the ongoing trade war to a full-blown battle as financial fights over tariffs come to a head. Mexico is waiting until Sunday to announce any retaliatory tariffs against the U.S.
Stock markets aren’t pleased about the growing trade war and these new tariffs. This has unsettled investors, causing the S&P 500 to fall 1.76% as of this writing. To put that in perspective, the index has only dropped 0.54% year-to-date.
What Stocks Are Weighing Down the SPX Index?
Turning to the TipRanks SPX heatmap tool, traders will see which stocks are keeping the index down on Tuesday. The bigger question is what stocks are up today as the heatmap tool shows a sea of red as shares retreat alongside today’s trade war news. Some standouts still in the green include Alphabet (GOOGL), McDonald’s (MCD), UnitedHealth (UNH), Pepsi (PEP), and Amgen (AMGN).
How to Invest in the S&P 500 Index?
Investors can’t take a direct stake in the S&P 500 as it’s only an index. However, they might consider buying shares listed on it. Those who believe the trade war will be short-lived may want to buy falling stocks before a potential rebound. For investors who think the trade war will be drawn out, a stake in more resilient shares is another option.
A third option for traders is buying shares of exchange-traded funds (ETFs) that track the S&P 500. There are ETFs that bet on or against the index, allowing for different trading strategies. One popular choice is the SPDR S&P 500 ETF Trust (SPY).
