US stocks closed sharply lower on Monday as President Donald Trump announced a 25% tariffs plan on Canada and Mexico, sparking fears of an economic slowdown and higher inflation.
The S&P 500 index posted its biggest daily percentage decline since December 18, falling 1.76% to 5,849.72. The Dow Jones Industrial Average fell 1.48%, while the Nasdaq Composite lost 2.64%.
Trump’s announcement comes after a survey showed manufacturing data dipping to 50.3 in February from 50.9 in January. Investors worried about tariffs and their impact on the economy.
Defensive sectors such as Real estate, healthcare, and Utilities outperformed, but most megacap growth sectors ended down. Energy and technology sectors led declines among the S&P 500’s 11 sectors.
The Dow Jones Industrial Average fell by 649.67 points, while Intel closed lower after erasing early gains. Tesla also fell 2.84% despite being reinstated as “top pick” among US autos by Morgan Stanley.
The CBOE Volatility Index rose to its highest since December 20, indicating increased market uncertainty. The Federal Reserve is expected to release new data this week, which could change the central bank’s view on interest rate cuts.
Trump is also expected to raise fentanyl-related tariffs on Chinese imports to 20% from 10% currently, unless Beijing ends fentanyl trafficking into the US.
Source: https://www.reuters.com/markets/us/futures-edge-up-with-economic-data-tariffs-focus-2025-03-03