US Stocks Drop Amid Tariff Fears

US stocks plunged on Monday due to concerns over the Trump administration's planned tariffs on Canada, China, and Mexico. However, the major indices pared their losses after President Trump announced a month-long delay in applying duties on Mexican imports.

The tech-heavy Nasdaq Composite (^IXIC) closed 1.2% lower, with Nvidia (NVDA), Apple (AAPL), and Tesla (TSLA) all losing over 2.5%. Meanwhile, the S&P 500 (^GSPC) fell 0.7%, and the Dow Jones Industrial Average (^DJI) dropped 0.3%.

Consumer discretionary stocks (XLY), which include automakers, were hit hard due to fears over the impact of tariffs. Tech (XLK) also lagged, as concerns over Apple's iPhone production in China and Nvidia's AI chip business in the region weighed on sentiment.

Tariffs Take Effect Tuesday

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.

Following a Monday morning call with Mexico's president Claudia Sheinbaum, Trump announced that tariffs against Mexico would be delayed by a month after she agreed to send soldiers to the countries' border to curb the flow of fentanyl and illegal migrants.

Investors were hoping for a similar deal with Canada during a phone call between President Trump and Prime Minister Justin Trudeau on Monday afternoon. However, Trudeau said his country will place 25% counter-tariffs on around $107 billion in American-made products.

Dollar Surge and Oil Gains

The US dollar index (DX-Y.NYB, DX=F) gained ground after surging earlier to trade near its highest levels in two years.

In oil markets, West Texas Intermediate futures (CL=F) pared gains after climbing over 2%.

Automakers Hit by Tariffs

Automakers' shares fell on Monday following Trump's imposition of tariffs on goods coming from Canada and Mexico. General Motors (GM), Ford (F), and Stellantis (STLA) all slipped, as did Tesla, despite not manufacturing any cars in Canada or Mexico.

Housing Stocks Decline

Major homebuilder stocks fell more than the broader market as investors digested the impact of tariffs on the construction industry. Toll Brothers (TOL), DR Horton (DHI), and Lennar Corporation (LEN) all dropped around 3%.

Gold Hits All-Time High

Gold (GC=F) touched new highs as investors sought safety amid the tariff war. The yellow metal reached an all-time high of $2,872 per ounce before paring gains.

Tech Stocks Lead Lower

Shares of Apple and Tesla dragged on the tech-heavy Nasdaq (^IXIC) as companies exposed to the Chinese market faced the brunt of tariff anxiety. Apple fell over 4%, while Tesla dropped 6%.

Wall Street Debates Tariffs' Impact

Wall Street economists debated the staying power of Trump's proposed tariffs on Mexico and Canada. Some analysts believe they are unlikely to last or even happen, while others expect them to be temporary and aimed at increasing the US's leverage in trade negotiations.