Wall Street’s main stock indexes closed sharply lower on Monday after President Donald Trump announced the start of 25% tariffs on Canada and Mexico, with the S&P 500 posting its biggest daily percentage decline since December 18.
Stocks had already slipped after an ISM survey, and they extended losses after Trump said 25% tariffs on Canada and Mexico will go into effect on Tuesday with reciprocal tariffs starting April 2. He said the North American countries had “no room left” to avert the tariffs.
ALSO READUS tariff related developments, global trends, FIIs trading key drivers for markets this week: Analysts
“Markets were looking for another 11th hour deal to further delay tariffs, but aren’t going to get one this time,” said Jamie Cox, managing partner at Harris Financial Group. “The threat of tariffs has run its course for now, so the next phase is to endure them. Markets have to price that reality, and those numbers are painted red.”
The ISM survey showed manufacturing PMI slipped to 50.3 last month from 50.9 in January, while the forward-looking new orders index contracted to 48.6 in February from 55.1 in January. The dip in the PMI mirrored declines in other sentiment measures as investors worried about tariffs.
ALSO READUS Stocks: Nasdaq leads Wall Street higher as Nvidia results grab focus
“I think it’s just more of a continuation of a string of bad economic news that tends to put a little bit of a dampener on the optimism that we saw from the fourth quarter earnings that were getting released, which were pretty good,” said James St. Aubin, chief investment officer at Ocean Park Asset Management in Santa Monica, California.
Energy and technology sectors led declines among the S&P 500’s 11 sectors, with most megacap growth sectors ending down including chip giant Nvidia – which is down 8.7%. Amazon closed down 3.4%.
Defensive sectors such as Real estate, healthcare , Utilities and consumer staples finished higher.
The Dow Jones Industrial Average fell 649.67 points, or 1.48%, to 43,191.24, the S&P 500 lost 104.78 points, or 1.76%, to 5,849.72 and the Nasdaq Composite lost 497.09 points, or 2.64%, to 18,350.19.
Recent reports of softening consumer demand have spurred fears of an economic slowdown and higher inflation.
» Read More
