New York CNN —
US stocks took a hit on Monday as investors prepared for President Trump’s tariffs on Canada, Mexico, and China that were set to begin just before midnight. The Dow Jones Industrial Average fell by 650 points, or 1.48%, closing at 43,191. It even dropped nearly 900 points during the afternoon before rebounding a bit. The S&P 500 and Nasdaq Composite followed suit, falling 1.76% and 2.64%, respectively.
Since Trump took office, the Nasdaq has lost around 6.5% of its value. At a White House press conference, Trump announced, “Tomorrow, tariffs — 25% on Canada and 25% on Mexico. That’ll start.” He emphasized that countries should invest in building factories in the United States to avoid these tariffs.
According to Trump, there was no room left to negotiate, and he intended to “punish” countries that, in his view, weren’t contributing fairly to the US economy. He confirmed that the tariffs would be effective immediately.
The VIX, which measures market volatility, spiked to its highest level this year after Trump’s announcement. Gustavo Flores-Macias, a government and public policy professor at Cornell University, noted that tariff uncertainties have erased the stock market’s previous gains following the election. Investors are now wary of potential price increases that may follow the tariffs.
Commerce Secretary Howard Lutnick stated that global companies could dodge tariffs if they invest in US manufacturing. For instance, TSMC, a Taiwanese chipmaker, recently announced a $100 billion investment in the US.
While tariffs might raise prices for imported goods, they could also increase demand for US-made products. Analysts from Goldman Sachs warn, however, that while some American businesses might benefit, others could suffer due to higher production costs and possible retaliatory measures from foreign countries.
Experts predict that US stocks will remain volatile until Trump’s policies signal a focus on growth. Jason Draho from UBS Global Wealth Management expressed a positive outlook for the medium term, despite current uncertainties.
On Monday morning, stock prices began to fall, partly due to a new manufacturing survey. Although the data indicated continued economic expansion, it also showed a slowdown. Many businesses reported that uncertainty around tariffs was leading them to hesitate on new orders.
Later in the day, Trump indicated plans to impose additional tariffs on agricultural products, causing further concern in the market. He encouraged American farmers to prepare to supply more products domestically.
Market sentiment turned to “extreme fear” as worries over tariffs intensified, according to CNN’s Fear and Greed Index. Stocks like Nvidia dropped significantly, losing 8.7%. The yield on 10-year Treasury notes fell to 4.16%, reflecting market anxiety about future economic conditions.
Bitcoin also saw a decline, trading around $85,600 after decreasing by 8.6% in just one day. In contrast, defense stocks in Europe soared to new heights as leaders discussed bolstering their military amid reduced US support for Ukraine.
Meanwhile, WTI crude oil prices dropped by 2.4% after OPEC announced plans to increase oil production in April.
Check out this related article: Market News Today: Wall Street Takes a Dive as Trump Unveils Tariffs on Canada and Mexico
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