US stocks skid as tariffs target imported steel and aluminium

US stocks have skidded after the US said it is imposing tariffs on steel and aluminium imported from Europe, Canada and Mexico.

Canada and Mexico responded with tariffs of their own and the European Union is expected to follow suit.

American steel makers mostly rose, while industrial companies fell as they face the prospect of paying more for metals they use to make aircraft and machinery.

Companies that make household items took some of the worst losses, as products including orange juice and peanut butter might be hit with European tariffs.

Mexico is planning duties on US exports including steel, pork products and sausages, while Canada said it will put reciprocal tariffs on steel and aluminium.

The European Union also said it will dispute the US tariffs with the World Trade Organisation, which could take years.

Meanwhile the parties will likely keep negotiating and contentious talks between the US and China are continuing as well.

While experts say a trade war remains a remote possibility, all of those disputes have been weighing on the market for months and the uncertainty that is creating has real effects.

David Kelly of JPMorgan Funds said the dragged-out process is discouraging businesses from investing because they do not want to build a product only to see it targeted by tariffs.

"You can do great harm to an economy just by leaving people up in the air about what the final deal is going to be," said Mr Kelly, the chief global strategist of JPMorgan Funds.

He said the uncertainty is undoing some of the effects of the recent corporate tax cut.

The S&P 500 index lost 18.74 points, or 0.7%, to 2,705.27. The Dow Jones industrial average fell 251.94 points, or 1%, to 24,415.84.

The Nasdaq composite dipped 20.34 points, or 0.3%, to 7,442.12 as technology companies like Alphabet and Facebook bucked the market's decline.

The Russell 2000 index, which is made up of smaller companies that tend to do more business in the US, slipped 14.32 points, or 0.9%, to 1,633.67. It closed at a record high on Wednesday.

The US tariffs go into effect on Friday. The Trump administration had announced them earlier but delayed their implementation to allow talks with the EU.

US Steel jumped 1.7% to 36.87 dollars and Century Aluminum gained 3.4% to 17.72 dollars. They made larger gains earlier in the day, but slipped after Canada announced reciprocal tariffs on steel and aluminium from the US starting July 1.

Boeing dropped 1.7% to 352.16 dollars and Caterpillar fell 2.3% to 151.91 dollars, while farm equipment maker Deere fell 3.6% to 149.51 dollars.

The tariffs could increase the cost of the metals they use to make their products, and tariffs in Europe or other markets could hurt their sales.

Mexico said it would penalise US imports including flat steel, cheese, fruit, pork bellies and sausage.

Dairy maker Dean Foods fell 4.3% to 9.57 dollars and Tyson Foods, which makes products including Jimmy Dean sausages, lost 3.9% to 67.47 dollars.

French officials said the EU will decide exact countermeasures in the coming weeks. European officials have threatened to retaliate against US products including orange juice, peanut butter, clothing, motorcycles and bourbon.

Harley-Davidson fell 2.2% to 41.08 dollars. Hormel, which makes Skippy peanut butter, declined 3.4% to 35.89 dollars.

GM said SoftBank is taking a 20% stake in the GM Cruise automated division. General Motors stock jumped 12.9% to 42.70 dollars. That was its biggest gain since GM went public again in 2010 after emerging from bankruptcy.

Discount retailers Dollar Tree and Dollar General both stumbled after they said inclement weather hurt their business in the first quarter of the year.

Their results fell short of Wall Street projections and Dollar Tree cut its profit forecast for the year.

Dollar Tree fell 14.3% to 82.59 dollars and Dollar General gave up 9.4% to 87.48 dollars.

Deutsche Bank slumped after the Wall Street Journal reported that the Federal Reserve determined the bank's US business is in "troubled condition". The stock lost 4.2% to 11.08 dollars.

US crude oil slipped 1.7% to 67.04 dollars a barrel in New York. Brent crude, used to price international oils, added 0.1% to 77.59 dollars per barrel in London.

Wholesale gasoline fell 1.1% to 2.16 dollars a gallon. Heating oil lost 1.8% to 2.19 dollars a gallon. Natural gas rose 2.3% to 2.95 dollars per 1,000 cubic feet.

Bond prices edged higher. The yield on the 10-year Treasury note fell to 2.83% from 2.85% and financial companies fell.

Gold lost 0.1% to 1,300.10 dollars an ounce. Silver fell 0.5% to 16.46 dollars an ounce. Copper stayed at 3.07 dollars a pound.

The dollar fell to 108.64 yen from 108.85 yen. The euro rose to 1.1685 dollars from 1.1654 dollars.

The DAX in Germany lost 1.4% and France's CAC 40 fell 0.5%. The British FTSE 100 index dipped 0.1%.

Asian stocks rose following big gains in the US the day before. Japan's Nikkei 225 index gained 0.8% and Hong Kong's Hang Seng index jumped 1.4%. South Korea's Kospi advanced 0.6%.