NEW YORK, March 4 (Xinhua) -- U.S. stocks suffered more losses on Tuesday as investors grew increasingly anxious about the economic impact of U.S. President Donald Trump's tariff policies.

The Dow Jones Industrial Average dropped 670.25 points, or 1.55 percent, closing at 42,520.99, following Monday's nearly 650-point selloff. The S&P 500 fell 1.22 percent to 5,778.15 after suffering its worst session of the year, while the Nasdaq Composite edged down 0.35 percent to 18,285.16.

At their lowest levels of the day, the Dow plunged more than 840 points, while the S&P 500 and Nasdaq both fell over 2 percent. The Nasdaq at one point neared correction territory, defined as a 10 percent drop from a recent peak. By the end of the session, more than 80 percent of S&P 500 stocks had finished in the red.

The United States implemented the anticipated 25 percent tariffs on imports from Canada and Mexico overnight while imposing additional 10 percent of tariffs on Chinese goods. In response, China and Canada swiftly announced their own retaliatory tariffs on various products, while Mexico indicated it would reveal countermeasures on Sunday.

"Obviously, market sentiment shifted negative quite strongly like maybe a week ago, and a lot of that had to do with the potential for tariffs," Timothy Anderson, managing director with MND Partners, division of TJM Investments, LLC., told Xinhua on Tuesday.

The White House maintains that these tariffs will boost domestic investment and manufacturing jobs, but investors are concerned that the trade policies could drive inflation higher, slow economic growth, and negatively impact multinational companies.

Retail stocks took a hit amid tariff concerns. Target fell 3 percent despite surpassing earnings expectations, as the company warned that economic uncertainty and trade tensions could weigh on upcoming results. Best Buy plunged 13.3 percent after reporting solid earnings but cautioning that rising tariffs might lead to higher prices, potentially hurting sales.

The auto industry, heavily exposed to trade disputes, also saw losses. Stellantis, the maker of Jeep and Chrysler, dropped by 4.38 percent, while General Motors and Ford declined 4.56 percent and 2.88 percent, respectively.

After Canadian Prime Minister Justin Trudeau said his country would also put a 25 percent levy on U.S. goods, Trump said in response that he would add even higher tariffs on the country.

"The fear here is that it's going to slow (economic) growth," said Adam Sarhan, CEO of 50 Park Investments in New York. "And when you have a slowdown in economic conditions, it's a situation where banks specifically make less money because fewer goods and services are traveling through the economy."

Recent economic data combined with escalating tariff tensions have heightened investor concerns about the U.S. economy. Bank and retail stocks led Tuesday's decline, as fears grew that the tariffs could further slow economic growth.

Following the latest losses, the S&P 500 has now fallen below its closing level from Election Day in November, when Trump secured his second term. Investors will closely watch Trump's address to Congress on Tuesday night for any comments on the tariffs, which were a central part of his campaign platform.

There probably was a large overreaction right now, said Anderson, who sees major flaws with GDPNow, a model developed by the Atlanta Fed to track economic growth.

Anderson expressed his optimism that tariff issues would be resolved over the next two to three months.

"It may take until late spring or early summer for a lot of these tariff disputes to work their way out," said Anderson. Enditem

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