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Illumina falls after China bans imports of its gene

sequencers

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Target ( TGT ) drops on bleak FY forecast

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Tesla's China-made EV sales fall 49.2% in February

*

Indexes down: Dow 1.62%, S&P 500 1.50%, Nasdaq 1.15%

(Updates to mid-session trading)

By Johann M Cherian and Sukriti Gupta

March 4 (Reuters) -

Wall Street's main indexes fell on Tuesday, with the

tech-heavy Nasdaq on course to confirm a correction, as

investors feared that an escalating trade war between the U.S.

and its partners could damage the country's economy.

The Nasdaq Composite index was on track to fall into

correction territory, having fallen 10% from its record closing

high on December 16.

Financials weighed on all the three indexes and those on

the S&P 500 led sectoral declines with a 3.6% drop.

Wall Street's biggest banks such as Citigroup ( C/PN ) and

JPMorgan Chase & Co ( JPM ) fell 7.4% and 4.8%, respectively,

sending the bigger banks index down 5.5%.

The CBOE market volatility index added 1.99 points to

touch a two-month high.

The latest trigger for equities came after the United

States' tariffs on imports from Mexico and Canada, along with

its doubled duties on Chinese goods that took effect on Tuesday.

Following this, Beijing responded with additional

tariffs on U.S. imports and

Canada announced 25% tariffs

on U.S. imports with immediate effect.

A standoff between the countries could upend nearly $2.2

trillion in two-way annual trade.

"The fear here is that it's going to slow (economic)

growth," said Adam Sarhan, chief executive 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."

At 11:47 a.m. ET, the Dow Jones Industrial Average

fell 698.44 points, or 1.62%, to 42,492.80, the S&P 500

lost 88.03 points, or 1.50%, to 5,761.69 and the Nasdaq

Composite lost 210.73 points, or 1.15%, to 18,139.46.

Ford and General Motors ( GM ), that have vast supply

chains across north America, fell 3% and 3.6%, respectively,

while housing stocks touched a one-year low.

Nasdaq components such as Nvidia ( NVDA ) and Meta

fell, while Tesla dropped 5.8% after weak monthly China

sales data.

Investors are pricing in that the surcharges will fan

inflation pressures, dampen demand and eat into corporate

profits at a time when recent data has resurfaced expectations

of a stalling economy. The domestically focused Russell 2000

index fell 2%.

Traders also added to interest rate cut bets with the

Federal Reserve now expected to lower borrowing costs by at

least three 25 basis points by December, according to data

compiled by LSEG.

New York Fed President John Williams' comments later in the

day will be parsed for the central bank's stance on monetary

policy.

U.S. shares of bullion miners such as Harmony Gold Mining

rose 3.7%, tracking higher gold prices as markets

flocked to the safe-haven asset.

Target ( TGT ) lost 5.8% after the retailer forecast

full-year comparable sales below estimates.

Best Buy ( BBY ) fell 15.3% after the electronics retailer

issued a downbeat forecast, while Walgreens jumped 6.6%

as a report hinted that the pharmacy chain is closing in on a

take-private deal by Sycamore Partners.

Declining issues outnumbered advancers by a 4.66-to-1

ratio on the NYSE and by a 3.27-to-1 ratio on the Nasdaq.

The S&P 500 posted 38 new 52-week highs and 43 new lows,

while the Nasdaq Composite recorded 19 new highs and 571 new

lows.