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Illumina ( ILMN ) 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

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Indexes down: Dow 1.41%, S&P 500 1.50%, Nasdaq 1.55%

(Updates for market open)

By Johann M Cherian and Sukriti Gupta

March 4 (Reuters) -

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

tech-heavy Nasdaq leading declines, as investors feared that an

escalating trade war between the U.S. and its partners could

damage the economy.

The Nasdaq Composite index fell 10% from its record high

hit on December 16 into what is commonly known as correction

territory.

At 10:01 a.m. ET, the Dow Jones Industrial Average

fell 610.73 points, or 1.41%, to 42,580.51, the S&P 500

lost 86.35 points, or 1.50%, to 5,762.26 and the Nasdaq

Composite lost 284.14 points, or 1.55%, to 18,066.06.

Financials led declines among the S&P 500's 11

sectors with a 3% drop. Wall Street's biggest banks such as

Citigroup ( C/PN ) and JPMorgan Chase & Co ( JPM ) fell 7.2% and

3.9%, respectively, sending the bigger banks index down

4.8%.

The CBOE market volatility index edged up 2.35 points

to touch a two-month high.

The latest trigger for equities came after the U.S. tariffs

on imports from Mexico and Canada, along with doubled duties on

Chinese goods took effect on Tuesday. Following this, Beijing

responded with additional tariffs on U.S. imports and Canada has

vowed a response.

A standoff between the countries could upend nearly $2.2

trillion in two-way annual trade.

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

chains across north America, fell 2.7% and 5.9%, respectively.

Nasdaq components such as Nvidia ( NVDA ) and Meta

fell, while Tesla dropped 6.4% after data showed that

the automaker's China-made electric vehicles sales fell 49.2% in

February.

Illumina ( ILMN ) fell 2.9% after China banned imports of

genetic sequencers from the medical equipment maker, just

minutes after Trump's tariff announcement.

"There are concerns that (tariffs are) going to put a

lot of pressure on the economy and the markets overall," said

Larry Tentarelli, chief technical strategist at Blue Chip Daily

Trend Report.

"Sectors that will be hit the hardest would probably be

the industrial sector because they're very cyclical, the small

caps ... and then (highly valued) tech stocks."

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 small-caps

Russell 2000 index fell 2%.

Interest rate futures point to the Federal Reserve

delivering at least three 25 basis points interest rate cuts by

December, up from about two on Monday, as traders bet on the

likelihood that slowing growth could nudge the central bank to

lower borrowing costs.

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 Sibanye Stillwater

rose 1.7%, tracking higher gold prices as markets

flocked to the safe-haven asset.

Target ( TGT ) lost 5.5% after the retailer forecast

full-year comparable sales below estimates.

Best Buy ( BBY ) fell 14% after the electronics retailer

issued a downbeat forecast and warned of impact of tariffs on

demand.

Declining issues outnumbered advancers by a 3.99-to-1 ratio

on the NYSE and by a 3.93-to-1 ratio on the Nasdaq.

The S&P 500 posted 38 new 52-week highs and 37 new lows,

while the Nasdaq Composite recorded 16 new highs and 484 new

lows.