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March 1 (UPI) -- The Dow Jones closed down 400 points Thursday after President Donald Trump said the United States will institute tariffs on steel and aluminum imports. The industrial average dropped 420.22 points to 24,608.98 after Trump said he would officially impose a 25 percent tariff on steel imports and a 10 percent tariff for aluminum next week.
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The 30-stock Dow Jones index fell a total of 586 points after rising more than 150 points earlier in the day, according to CNBC.
The S&P 500 also dropped 1.4 percent with industrials as its weakest performing sector and the Nasdaq composite fell 1.3 percent.
Financial experts warned of a potential "trade war" as Chinese officials condemned the tariff announcement.
"That could really spook the market," said Chaikin Analytics CEO Marc Chaikin. "The biggest wildcard would be a trade war and nobody should be excited for that."
It wasn't made clear whether some countries would be exempt from the tariff, but U.S. businesses heavily reliant on steel and aluminum saw their stock shares drop.
Shares of Boeing fell 3 percent, General Motors dropped 4 percent and Ford experienced a 3 percent decline, according to CNN Money.
"This clearly will [lead to] higher prices in the production chain, which is part of the inflation path," Prudential Financial chief market strategist Quincy Krosby said.
Fears about oncoming U.S. inflation were stoked as the Consumer Price Index rose a half-percent in January, well above the market estimate of 0.2 percent.
The Dow Jones also experienced the largest single day drop in history on Feb. 5 when it fell 1,175 points.
