US Stocks Fall on Monday Amid Tariff Concerns
US stocks declined on Monday in response to President Donald Trump's announcement of tariffs on China, Mexico, and Canada. However, major averages pared losses mid-morning after Trump announced a one-month delay in tariffs against Mexico.
The tech-heavy Nasdaq Composite (^IXIC) fell around 1.3%, recovering some of its earlier losses. Meanwhile, the S&P 500 (^GSPC) lost roughly 0.8%, and the Dow Jones Industrial Average (^DJI) moved 0.3% lower.
Consumer discretionary (XLY) stocks, which include automakers, were among the hardest hit early in the day. Tech (XLK) also weighed on markets as shares of AI chip giant Nvidia (NVDA), iPhone maker Apple (AAPL), and EV manufacturer Tesla (TSLA) all fell.
The tariffs, initially set to take effect on Tuesday, include 25% duties on Canada and Mexico and 10% on China. Energy imports from Canada will carry a lower 10% duty. However, following a Monday morning call with Mexico's president, Trump delayed the implementation of tariffs on its imports.
He stated that Mexico's president agreed to send Mexican soldiers to the border to stop the flow of fentanyl and illegal migrants into the US.
"We further agreed to immediately pause the anticipated tariffs for a one-month period, during which we will have negotiations headed by Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, and Secretary of Commerce Howard Lutnick, and high-level Representatives of Mexico," Trump said.
The US dollar index (DX-Y.NYB, DX=F) initially surged to near its highest levels in two years but later retraced its gains.
In oil markets, West Texas Intermediate futures (CL=F) were largely flat, pulling back from an earlier jump of over 2%.
Trump's tariff announcement sparked retaliatory statements, with Canadian Prime Minister Justin Trudeau announcing that his country would impose 25% counter-tariffs on approximately $107 billion in American-made products. Trump said he spoke with Trudeau on Monday morning and plans to do so again later that afternoon.