Stocks Plunge After Trump Confirms Tariffs on Canada & Mexico \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ U.S. stocks fell sharply after President Trump announced tariffs on Canada and Mexico would take effect. The S&P 500 dropped 1.8%, the Dow lost 649 points, and the Nasdaq plunged 2.6%. Investors had hoped for a last-minute deal, but uncertainty over trade and economic signals led to a market-wide selloff.
Market Sell-Off: Quick Looks
- Tariffs Take Effect – Trump confirmed that tariffs on Canadian and Mexican imports would begin Tuesday, rattling investors.
- S&P 500 Wipes Out Gains – The index fell 1.8%, cutting its post-election rally to just over 1%.
- Dow and Nasdaq Plunge – The Dow lost 649 points (1.5%), while the Nasdaq slumped 2.6%.
- Manufacturing Slowdown – A weaker-than-expected U.S. manufacturing report added to economic concerns.
- Tech Stocks Hit Hard – Nvidia plunged 8.8%, and Tesla dropped 2.8%.
- Crypto Stocks Reverse Gains – Coinbase fell 4.6%, and MicroStrategy lost 1.8% despite initial optimism over Trump’s crypto plans.
- Bond Yields Fall – The 10-year Treasury yield dropped to 4.16% as economic uncertainty loomed.
- Global Markets React – European and Asian stocks outperformed U.S. markets, with China preparing possible trade retaliation.
Deep Look
Stocks Plunge as Trump’s Tariffs Spark Market Turmoil
Wall Street was hit with a sharp sell-off Monday after President Donald Trump confirmed that his administration’s tariffs on Canadian and Mexican imports would take effect within hours. The news dashed investor hopes for a trade compromise, fueling fears of economic disruption.
The S&P 500 fell 1.8%, slashing its post-election gains to just over 1% from a peak of 6%. The Dow Jones Industrial Average tumbled 649 points (1.5%), while the Nasdaq Composite sank 2.6%, reflecting broad uncertainty in financial markets.
Monday’s downturn marked another volatile session for Wall Street, which has endured a rocky few weeks due to trade tensions and weaker economic data. Investors had hoped that Trump would delay the tariffs again or soften their impact, but his firm stance on trade policy sent markets into freefall.
Manufacturing Slowdown Deepens Economic Fears
Adding to Wall Street’s concerns was a weaker-than-expected U.S. manufacturing report released Monday. The report showed that factory activity was still growing but at a slower pace than expected.
More concerningly, manufacturers reported a contraction in new orders, suggesting that future production could weaken further. Prices also rose sharply, leading to speculation over who will bear the cost of Trump’s tariffs—companies or consumers.
Timothy Fiore, chair of the Institute for Supply Management’s manufacturing survey committee, summed up the market’s concerns:
✔ “Demand eased, production stabilized, and destaffing continued as panelists’ companies experience the first operational shock of the new administration’s tariff policy.”
Investors had hoped Trump was using tariffs as a negotiation tactic, but his decision to move forward with Canadian and Mexican tariffs eliminated that optimism.
Tech and Crypto Stocks Lead the Declines
The market’s downturn hit technology stocks particularly hard.
- Nvidia plummeted 8.8% amid broader market concerns.
- Tesla fell 2.8%, continuing its recent struggles.
Cryptocurrency-related stocks, which had seen strong gains in early trading, also suffered losses.
- Coinbase dropped 4.6% as volatility hit the crypto sector.
- MicroStrategy fell 1.8%, reversing morning gains despite optimism around Trump’s crypto strategic reserve plan.
Global Markets React to U.S. Trade Tensions
Across the Pacific in China, manufacturers reported an increase in orders in February as importers rushed to buy goods before U.S. tariffs increased. However, Chinese state media hinted at possible retaliation, adding another layer of uncertainty to global trade.
Trump had already imposed a 10% tariff on Chinese imports, with another hike to 20% set for Tuesday. He also ended the “de minimis” loophole, which had exempted imports worth less than $800 from tariffs—a move likely to impact online retailers and small businesses.
Meanwhile, Hong Kong’s stock market saw a bright spot. The Chinese bubble tea chain Mixue Bingcheng surged 43% in its $444 million market debut, making it one of the biggest IPO successes of the year.
European and Asian Markets Outperform U.S. Stocks
Unlike Wall Street, European and Asian stocks posted gains, buoyed by reports of easing inflation in February. Investors expect this could lead to another rate cut by the European Central Bank.
✔ Germany’s DAX surged 2.6%
✔ France’s CAC 40 jumped 1.1%
✔ Tokyo’s Nikkei index also posted gains
Despite Trump’s “America First” policies, stocks outside the U.S. have performed better than the S&P 500 in 2024, reflecting growing concerns over the strength of the U.S. economy.
Bond Market Signals Slowing Economic Growth
The bond market also reacted to rising economic uncertainty, with the 10-year Treasury yield dropping to 4.16% from 4.24%.
Since January, yields have fallen sharply from a high of 4.80%, reflecting investor fears that the U.S. economy is slowing down. Lower bond yields often signal increased demand for safe-haven assets, but this time, analysts worry that the drop reflects deeper economic concerns.
Michael Wilson, a strategist at Morgan Stanley, warned that this decline in yields isn’t necessarily good news for stocks. “The reason for this recent drop in yields is softer economic growth expectations, meaning stocks are unlikely to get a boost from lower interest rates.”
What’s Next for the Market?
The next major catalyst for the market will be Trump’s upcoming speech to Congress, where he is expected to outline his administration’s trade strategy and economic priorities.
With Wall Street already on edge, investors will closely watch for any signs of compromise on trade or further policy shifts.
For now, market volatility remains high, and the question on investors’ minds is:
✔ Will Trump’s tariff policy push the U.S. economy toward slower growth?
✔ Can the Federal Reserve intervene, or will inflation concerns limit its actions?
✔ Will other global markets continue outperforming Wall Street?
As economic uncertainty deepens, investors remain cautious, preparing for further market turbulence in the weeks ahead.
Stocks Plunge After
