The Dow Jones industrial index fell 0.3 percent, the broad S&P 500 index 1.1 percent and the technology-heavy Nasdaq composite index 2 percent.
The hour of doom is approaching for many of the import tariffs that Trump has announced, withdrawn, put on hold or postponed. It is said that they will come into effect on April 2.
On Wednesday, after the stock market closed, Trump will hold a press conference at the White House to clarify how the tariffs on the automotive industry will look.
Prior to the announcement, the three major American car manufacturers slowed down on Wall Street. Ford's stock fell 1 percent, General Motors 3.1 and Stellantis 3.6 percent.
Increased inflation risk
The general stock market decline was reinforced by the fact that all seven very index-heavy technology companies, known as "The magnificent seven", fell, and some significantly.
The most severely affected giants were the semiconductor giant Nvidia and the electric car manufacturer Tesla, which fell 6 and 5.6 percent, respectively.
On Wednesday, the central bank Federal Reserve (Fed) also warned that the risk has increased that the tariffs will drive up inflation above the US target of 2 percent.
At the same time, hope remains that the broader tariff regime that will come into effect on April 2 will be less extensive than feared and that a full-scale global trade war can be avoided.
"Hit risk appetite"
The uncertainty surrounding the tariff announcement has undoubtedly hit risk appetite already, so we can see a small relief rally in risk assets and in the dollar when the announcement is behind us, says Matthew Weller, market chief at Forex.com, to Bloomberg.
The S&P 500 took Wednesday's blow after three consecutive trading days with rising prices, and the index had recovered almost half of its previous losses in March over eight days.
Mark Hackett, chief strategist at mortgage giant Nationwide, sees signs of recovery.
Market sentiment is calming down after a tumultuous period, he says to CNBC.
