A sell-off hit Wall Street on Monday after President Trump said tariffs he had announced earlier on Canada and Mexico would take effect within hours.
- The S&P 500 fell 104.78 points, or 1.8%, to 5,849.72.
- The Dow Jones Industrial Average fell 649.67 points, or 1.5%, to 43,191.24.
- The Nasdaq composite fell 497.09 points, or 2.6%, to 18,350.19.
Trump
said there was no room left for negotiations that could lower tariffs set to begin Tuesday on Canadian and Mexican imports. That dashed Wall Street's hopes that Trump would choose a less painful path for global trade, and it followed the latest warning signal on the US economy's strength, the
AP reports. The hope on Wall Street had been that Trump was using the threat of tariffs as a tool for negotiations and that he would ultimately go through with less damaging policies for the global economy and trade.
After the S&P 500 set a record following fatter-than-expected profit reports from big US companies last month, the market began diving sharply amid weaker-than-expected reports on the economy, including a couple showing US households are getting much more pessimistic about inflation because of the threat of tariffs. The market's recent slump has hit Nvidia and some other formerly high-flying areas of the market particularly hard. They fell even more Monday, with Nvidia down 8.7% and Elon Musk's Tesla down 2.8%. Elsewhere on Wall Street, Kroger fell 3% after the grocery chain's Chairman and CEO Rodney McMullen resigned following an internal investigation into his personal conduct.
Wall Street's wipeout even pulled down stocks of companies enmeshed in the cryptocurrency economy, which rose strongly in the morning. They initially bounced after Trump said over the weekend that his administration was moving forward with a crypto strategic reserve. But MicroStrategy, the company that's now known as Strategy and has been raising money to buy bitcoin, slid to a loss of 1.8%. Coinbase, the crypto trading platform, fell 4.6%.
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The latest weaker-than-expected report arrived Monday on US manufacturing. Overall activity is still growing, but not by quite as much as economists had forecast. Perhaps more discouragingly, manufacturers are seeing a contraction in new orders. Prices, meanwhile, rose amid discussions about who will pay for Trump's tariffs. "Demand eased, production stabilized, and destaffing continued as panelists' companies experience the first operational shock of the new administration's tariff policy," said Timothy Fiore, chair of the Institute for Supply Management's manufacturing business survey committee.
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