US Stocks Fall on Tariff Rollout
On Monday, US stocks declined as the Trump administration prepared to implement tariffs on Canada and China. However, major averages pared larger losses after President Donald Trump announced a one-month delay on duties against Mexican imports.
The tech-heavy Nasdaq Composite (^IXIC) closed 1.2% lower, partially recovering from earlier losses. Meanwhile, the S&P 500 (^GSPC) fell approximately 0.7% and the Dow Jones Industrial Average (^DJI) dropped 0.3%.
Consumer discretionary (XLY) stocks, including automakers, were impacted by fears of tariff consequences. Technology (XLK) also underperformed as shares of Nvidia (NVDA), Apple (AAPL), and Tesla (TSLA) all declined by over 2.5%.
The tariffs, initially set for Tuesday, include 25% duties on Canada and Mexico and 10% on China. Energy imports from Canada will face a reduced tariff of 10%.
Following a morning call with Mexican President Claudia Sheinbaum, Trump declared that tariffs against Mexico would be delayed for a month. Sheinbaum agreed to send troops to the border to curb the flow of fentanyl and illegal migrants into the US.
Investors anticipated a similar deal to be announced as President Trump and Prime Minister Justin Trudeau conversed over the phone on Monday afternoon. Trump's initial weekend tariff announcement led to retaliatory statements, including Trudeau's announcement that Canada will impose 25% counter-tariffs on approximately $107 billion worth of American-made products.
The US dollar index (DX-Y.NYB, DX=F) weakened after previously rising near its highest levels in two years. In the oil market, West Texas Intermediate futures (CL=F) pared gains after surging over 2%.