Weak economic data and newly imposed U.S. tariffs on major trading partners triggered Wall Street’s steepest single-day decline of 2025 on Monday.
The S&P 500 dropped 1.8%, turning negative for the year and marking its worst session since December. The Dow Jones fell 650 points, at one point tumbling 800 points from its intraday high. The Nasdaq Composite slumped nearly 2.7%, weighed down by an 8% sell-off in Nvidia shares.
Markets remained flat for most of the morning before plunging after U.S. President Donald Trump announced that a 25% tariff on Canadian and Mexican imports would take effect Tuesday, ending hopes of a last-minute deal like the one brokered last month.
“There’s no room left for Mexico or Canada,” Trump said at the White House alongside Commerce Secretary Howard Lutnick. “Reciprocal tariffs start on April 2 … but very importantly, tomorrow, tariffs—25% on Canada and 25% on Mexico—will start,” he declared, adding that a 10% additional tariff on China would also be implemented.
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Monday’s drop followed a string of disappointing economic reports, including weaker housing data, rising jobless claims, and a decline in personal spending. Cryptocurrency markets, often seen as a barometer for risk sentiment post-election, also tumbled, reversing gains from the previous session when Trump advocated for a national digital-asset reserve.
“It’s time to be nervous,” said Callie Cox of Ritholtz Wealth Management. “Not bearish, but nervous. While there’s no clear evidence of an imminent crash, the economy is shifting rapidly, and the relentless headlines are leaving investors uncertain.”
In contrast, European equities surged, extending an international rotation trend that has dominated the year. Wall Street’s volatility index, the VIX, spiked to its highest level since December. Major U.S. tech stocks slumped, with Nvidia falling 8.7%. Meanwhile, Taiwan Semiconductor Manufacturing Co. announced plans to invest an additional $100 billion in U.S. plants, aligning with Trump’s push for domestic manufacturing expansion.
Oil prices declined as OPEC+ proceeded with plans to increase production under pressure from Trump to curb costs. The yield on 10-year U.S. Treasuries slipped five basis points to 4.16%. The U.S. dollar weakened, dropping 0.4%, while Bitcoin plunged 9.5%.
According to JPMorgan Chase strategists led by Mislav Matejka, the rotation out of U.S.
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