U.S. stocks closed lower on Monday as investors grappled with uncertainty surrounding the Trump administration's planned tariff measures. The market reacted to the impending tariffs, originally set to take effect on Tuesday, which include 25 percent duties on goods from Canada and Mexico, and 10 percent on Chinese imports. Canadian energy imports are facing a reduced 10 percent rate.
The Dow Jones Industrial Average fell 122.75 points, or 0.28 percent, to close at 44,421.91. The S&P 500 dropped 45.96 points, or 0.76 percent, to 5,994.57, while the Nasdaq Composite Index slid 235.49 points, or 1.20 percent, to 19,391.96.
Six of the eleven primary S&P 500 sectors closed in the red, with technology and consumer discretionary leading the declines, down 1.80 percent and 1.35 percent, respectively. In contrast, consumer staples and utilities led the gainers, rising 0.68 percent and 0.46 percent.
The tariffs sparked concerns over potential price hikes and economic strain. After a Monday morning call with Mexico's President Claudia Sheinbaum, President Trump agreed to postpone tariffs on Mexican imports for a month. Sheinbaum committed to deploying troops at the border to curb fentanyl trafficking and illegal immigration.
Later on Monday, Trump announced that the tariffs on Canada, announced on Saturday, would be paused for a 30-day period to assess whether a final economic deal with Canada can be structured.
Read more: U.S. tariff move sparks criticism, concern worldwide
Investors are closely watching these developments. \\"This is a very fluid and evolving situation,\\" said Victoria Greene of G Squared Private Wealth. \\"For now, our baseline thesis is that the bulk of these are transitory and likely to be watered down with concessions. We are on top of developments and watching how this may affect earnings, the U.S. dollar, and inflation.\\"
Despite the immediate market reaction, some analysts believe the impact may be mitigated. Wells Fargo Investment Institute noted that the administration's \\"targeted and gradual approach\\" aims to lessen disruptions to U.S. growth. Paul Christopher, head of global investment strategy at the institute, emphasized that services remain the primary economic driver, while the industrial sector continues to struggle with weak pricing power amid a manufacturing downturn.
\\"It's probably going to take several quarters to have a noticeable impact,\\" Christopher said. \\"You could eventually see some higher prices, but not right away.\\"
Reference(s):
cgtn.com
