NEW YORK — U.S. stock markets tumbled Monday as investor concerns mounted over newly imposed tariffs on Canadian and Mexican imports. President Donald Trump confirmed that 25% tariffs would take effect Tuesday, leaving no room for negotiation. This announcement fueled fears of an escalating trade war, driving major indexes into the red.
The S&P 500 slid 1.8% to 5,849.72, marking its steepest one-day decline since December. The Dow Jones Industrial Average lost 649.67 points, or 1.5%, closing at 43,191.24. The Nasdaq Composite plunged 2.6% to settle at 18,350.19. These losses underscore Wall Street’s unease over trade uncertainty and its potential impact on corporate earnings and economic growth.
Economic Data Points to Slowing Growth
Adding to market jitters, the Institute for Supply Management (ISM) reported a slowdown in U.S. manufacturing growth. Its Purchasing Managers’ Index (PMI) fell to 50.3 in February from 50.9 in January. New orders dropped sharply to 48.6 from 55.1, suggesting potential struggles ahead for manufacturers.
Tech Stocks Lead Market Decline
Technology and energy stocks bore the brunt of Monday’s sell-off. Nvidia (NVDA) plunged 8.7%, extending last week’s losses amid growing skepticism over AI-driven spending. Broadcom (AVGO) tumbled 6%, while Super Micro Computer (SMCI) sank 13%, making it the worst-performing stock in the S&P 500.
Defensive Sectors Outperform Amid Market Turbulence
While most sectors declined, real estate, healthcare, utilities, and consumer staples saw modest gains as investors sought defensive plays. These sectors tend to hold up better during periods of economic uncertainty, attracting capital as traders hedge against volatility.
Treasury Yields Drop as Investors Flock to Safe-Haven Assets
Bond markets reflected heightened risk aversion, with the 10-year U.S. Treasury yield falling to 4.16% from 4.23%. As trade tensions escalated, investors sought refuge in bonds, gold, and other safe-haven assets.
Global Markets React to Trade and Geopolitical Developments
European stocks surged after news broke that EU leaders were working on a peace plan for Ukraine. Germany’s DAX index climbed 2.4%, while the UK’s FTSE 100 reached a record close of 8,871.31. Defense stocks like BAE Systems and Rheinmetall rallied, reflecting growing geopolitical uncertainty.
Commodities and Cryptocurrency Markets See Mixed Reactions
Gold futures rose 2% to $2,905 per ounce as investors hedged against market volatility. Meanwhile, West Texas Intermediate (WTI) crude oil declined 2%, closing at $68.45 per barrel, reflecting concerns over slowing economic demand.
Bitcoin saw wild swings, initially jumping on Trump’s announcement of a “Crypto Strategic Reserve” before retreating. The cryptocurrency briefly climbed above $93,000 but later settled near $86,200 after dipping below $80,000 last week.
Looking Ahead: Key Market Drivers
Investors are now turning their attention to Friday’s February jobs report, which could provide further insights into economic momentum. Additionally, market participants will monitor developments related to tariffs and their impact on corporate earnings. The Federal Reserve’s stance on interest rates remains a key focus, especially as economic data continues to send mixed signals.
Market Uncertainty Weighs on Sentiment
Monday’s losses underscore growing investor anxiety amid trade disputes and weakening economic indicators. The new tariffs on Canada and Mexico introduce fresh uncertainties, forcing investors to reassess risk exposure. As the market digests these developments, traders will remain vigilant, tracking policy shifts and economic data to navigate the evolving landscape.
Bottom Line
The stock market’s sharp decline reflects deep-seated concerns over trade policy, economic growth, and corporate earnings. With volatility on the rise, investors must stay informed and agile to manage risks in today’s unpredictable market environment.
Anna Kim is a media reporter for the Rockland Daily News, covering the business of Rockland County and digital disruption in the entertainment industry. She has been a member of the Company Town team for more than a decade. She previously wrote for the Miami Herald and the Palm Beach Post. A native of Wyoming, she is a graduate of the University of Colorado and Columbia University