By Medha Singh
U.S Commerce Secretary Wilbur Ross said a 25 percent tariff on steel imports and a 10 percent levy on aluminium imports from its allies would go into effect at Thursday midnight.
Mexico's economy ministry imposed "equivalent" measures and said it will stay in place until the United States eliminates its tariffs.
Mexico targeted pork legs, apples, grapes and cheeses as well as steel. Shares of U.S. food companies were lower with Tyson Foods down 3 percent and Kraft Heinz off 2.5 percent.
Shares of Boeing fell 1.4 percent and Caterpillar declined 1.8 percent. The stocks were among the biggest drag on the Dow Jones Industrials.
"The market is worried about retaliation, they are looking for what would come from the EU side," said Zhiwei Ren, managing director and portfolio manager at Penn Mutual Asset Management in Horsham, Pennsylvania.
"But this is another negotiation tactic on the U.S. side and they want to use tariffs as a bargaining tool for other negotiations."
The S&P Composite 1500 Steel index rose 1.1 percent on the tariffs news, led by gains in AK Steel and US Steel.
Friction between the United States and its trading partners have roiled financial markets, especially after President Donald Trump in March decided to impose the metal tariffs.
Adding to the trade worries was a report that Trump aimed to push German carmakers out of the United States altogether, after launching a national security probe last week into car and truck imports.
At 11:26 a.m. EDT the Dow Jones Industrial Average was down 238.06 points, or 0.97 percent, at 24,429.72, the S&P 500 was down 12.60 points, or 0.46 percent, at 2,711.41 and the Nasdaq Composite was down 5.88 points, or 0.08 percent, at 7,456.58.
Ten of the 11 major indexes were trading lower with the technology sector being the only gainer with a 0.2 percent rise.
A 2.5 percent jump in shares of Alphabet Inc and 1.3 percent rise in Facebook shares capped losses on the tech-heavy Nasdaq.
The biggest percentage gainer on the S&P 500 was General Motors, which surged 9.8 percent after Japan's SoftBank Group decided to invest $2.25 billion in its autonomous vehicle unit.
Dollar General declined about 8.2 percent and Dollar General dropped 12 percent after both discount retailers missed Wall Street estimates for their quarterly same-store sales.
Declining issues outnumbered advancers for a 1.64-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.16-to-1 ratio on the Nasdaq.
The S&P index recorded 17 new 52-week highs and eight new lows, while the Nasdaq recorded 114 new highs and 29 new lows.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)