US Stocks Pull Back on Monday Amidst Tariff Fears

On Monday, US stocks witnessed a decline as investors reacted to the scheduled tariff implementation by the Trump administration against Canada and China. However, major averages trimmed their losses after President Trump announced a one-month delay in duties on Mexican imports.

The Nasdaq Composite (^IXIC) closed 1.2% lower, though it recovered a portion of its earlier losses. The S&P 500 (^GSPC) fell approximately 0.7%, while the Dow Jones Industrial Average (^DJI) declined by 0.3%. Consumer discretionary stocks, including automakers, were particularly affected due to concerns regarding the impact of tariffs. The tech sector also underperformed, with shares of chip giant Nvidia (NVDA), iPhone maker Apple (AAPL), and electric vehicle manufacturer Tesla (TSLA) all falling by over 2.5%.

The tariffs, originally scheduled to take effect on Tuesday, include 25% duties on Canada and Mexico, and 10% on China. Energy imports from Canada will face a lower 10% duty. Following a phone call with Mexican President Claudia Sheinbaum on Monday morning, Trump announced that tariffs against Mexico would be delayed for a month after Sheinbaum agreed to deploy soldiers to the shared border to combat the flow of fentanyl and illegal migrants into the US.

Investors were hopeful that a similar agreement would be reached at the eleventh hour as President Trump and Prime Minister Justin Trudeau held a phone call on Monday afternoon. Trump's tariff announcement over the weekend had initially provoked retaliatory statements, with Trudeau stating that his country would impose counter-tariffs of 25% on approximately $107 billion worth of American-made products.

The US dollar index (DX-Y.NYB, DX=F) retreated after earlier surging to trade near its highest levels in two years. In the oil market, West Texas Intermediate futures (CL=F) pared gains after an initial jump of over 2%.

Key Updates:

* Mon, February 3, 2025 at 9:53 PM UTC: Canadian Prime Minister announces a one-month pause in US tariffs on Canadian goods.
* Mon, February 3, 2025 at 9:04 PM UTC: Stocks rebound as Trump pauses tariffs on Mexico.
* Mon, February 3, 2025 at 8:30 PM UTC: Auto stocks slide on fears of Trump tariffs harming the industry.
* Mon, February 3, 2025 at 8:15 PM UTC: Housing stocks decline as investors digest tariff news.
* Mon, February 3, 2025 at 7:56 PM UTC: Trump suggests new US sovereign wealth fund could play a role in TikTok rescue.
* Mon, February 3, 2025 at 7:45 PM UTC: Mexico and Canada tariffs could significantly increase grocery expenses in the coming months.
* Mon, February 3, 2025 at 7:16 PM UTC: Defensive sectors outperform amid market jitters over tariffs.
* Mon, February 3, 2025 at 6:45 PM UTC: Gold reaches an all-time high as investors seek safe haven during the tariff war.
* Mon, February 3, 2025 at 5:50 PM UTC: Apple and Tesla shares lead tech sector lower as companies exposed to China feel the brunt of tariff anxiety.
* Mon, February 3, 2025 at 4:57 PM UTC: Wall Street debates the staying power of tariffs, with many economists anticipating a temporary nature.
* Mon, February 3, 2025 at 4:36 PM UTC: Bitcoin recovers from losses after US delays tariffs against Mexico.
* Mon, February 3, 2025 at 3:55 PM UTC: Major averages rebound slightly after Trump delays tariffs against Mexico for one month.
* Mon, February 3, 2025 at 3:10 PM UTC: Economic activity in US manufacturing expands for the first time in over two years.
* Mon, February 3, 2025 at 2:37 PM UTC: Market sell-off highlights investors underestimating the risk of tariffs.
* Mon, February 3, 2025 at 2:33 PM UTC: Stocks decline sharply as trade war sparks market sell-off.
* Mon, February 3, 2025 at 1:50 PM UTC: Nvidia sinks in premarket trading, leading tech sector lower.
* Mon, February 3, 2025 at 1:16 PM UTC: Good morning round-up of top economic and market news.
* Mon, February 3, 2025 at 12:28 PM UTC: US dollar strengthens to near two-year high.
* Mon, February 3, 2025 at 11:05 AM UTC: Shares of major US automakers retreat in premarket trading.
* Mon, February 3, 2025 at 10:34 AM UTC: Investors advised to keep a close watch on footwear and clothing stocks due to the impact of tariffs.