US Stocks Fall on Tariff Rollout
Trump Delays Mexico Tariffs for a Month
US stocks experienced a decline on Monday in response to the Trump administration's planned tariff implementation against Canada and China. However, the major averages pared their losses when President Trump announced a one-month delay for Mexico.
Tech and Consumer Stocks Hit
The tech-heavy Nasdaq Composite (^IXIC) closed down 1.2%, and major companies such as Nvidia, Apple, and Tesla all reported losses of over 2.5%. Consumer discretionary stocks, including automakers, were also impacted by fears of tariff consequences.
Tariffs to Take Effect on Tuesday
The initial tariffs, intended to go into effect on Tuesday, include 25% duties for Canada and Mexico, as well as 10% for China. Fuel imports from Canada will face a lower 10% duty.
Canada, Trump Discuss Tariffs
President Trump held a phone call with Canadian Prime Minister Justin Trudeau on Monday afternoon. No similar deal was announced as with Mexico. However, Trudeau indicated Canada's $1.3 billion border plan, including increased security measures, would lead to a 30-day tariff pause.
Mexico Deal Announced
Following a Monday morning call with Mexico's President Claudia Sheinbaum, Trump announced tariff delays for Mexico after Sheinbaum agreed to deploy soldiers to curb illegal immigration and fentanyl flow into the US.
US Dollar Dips
The US dollar index (DX-Y.NYB) declined slightly after initially surging to its highest level in two years.
Energy Markets Fluctuate
West Texas Intermediate futures (CL=F) pared gains after a significant spike of over 2%.
Auto Stocks Slip on Tariff Fears
Automaker stocks faced losses due to President Trump's tariffs on Canadian and Mexican imports. However, these losses were mitigated following the delay for Mexico.
Housing Stocks Underperform
Homebuilding stocks experienced a decline greater than the broader market as the industry anticipates tariff-driven construction cost increases.
Gold Touches Record High
Gold (GC=F) reached a new all-time high amidst tariff uncertainties and concerns over a trade war.
Defensive Sectors Outperform
Defensive sectors, such as Healthcare, Energy, and Consumer Staples, outperformed as investors sought safe havens during the market volatility.
Wall Street Debates Tariffs' Impact
Economists speculate on the longevity of President Trump's tariff threats, with some anticipating temporary measures and others seeing a more significant impact.
Bitcoin Recovers Losses
Bitcoin (BTC-USD) initially tumbled but recovered after President Trump's announcement of the Mexico tariff delay.
Manufacturing Activity Expands
The Institute for Supply Management's manufacturing PMI indicated the sector's expansion after two years of contraction.