U.S. stock markets faced a downturn on Monday as the Trump administration's proposed tariff measures sparked uncertainty among investors.
The Dow Jones Industrial Average fell by 122.75 points (0.28%) to close at 44,421.91, while the S&P 500 dropped 45.96 points (0.76%) to 5,994.57. The Nasdaq Composite Index saw a significant decline of 235.49 points (1.20%), finishing at 19,391.96.
Among the S&P 500 sectors, technology and consumer discretionary led the decline, down 1.80% and 1.35% respectively, whereas consumer staples and utilities showed gains of 0.68% and 0.46%.
The planned tariffs include a 25% duty on goods from Canada and Mexico, with a reduced 10% rate for Canadian energy imports, and a 10% tariff on Chinese imports. However, following discussions with Mexico's President Claudia Sheinbaum, President Trump agreed to postpone tariffs on Mexican imports for a month, contingent upon Mexico deploying troops at the border to address fentanyl trafficking and illegal immigration.
Later, Trump also announced a 30-day pause on the tariffs imposed on Canada to explore a final economic agreement between the two nations.
Market reactions were mixed as some investors remained optimistic about a resolution, while others stayed cautious about potential economic strains and price hikes.
Victoria Greene of G Squared Private Wealth commented, "This is a very fluid and evolving situation. For now, our baseline thesis is that the bulk of these are transitory and likely to be watered down with concessions. We are on top of developments and watching how this may affect earnings, the U.S. dollar and inflation."
Wells Fargo Investment Institute noted the administration's targeted and gradual approach aims to mitigate disruptions to U.S. growth, with Paul Christopher emphasizing that the service sector remains a key driver while the industrial sector faces challenges amid a manufacturing downturn.
Reference(s):
cgtn.com
