US stocks tumbled on Monday as investors braced for President Donald Trump's proposed tariffs on Canada, Mexico, and China to take effect by the midnight deadline. The Dow Jones Industrial Average plunged 650 points, or 1.49%, in afternoon trading, reflecting widespread investor anxiety. The broader S&P 500 fell 1.69%, while the Nasdaq Composite dropped 2.27%, marking a challenging start to the week for the stock market.
The markets slid further in the afternoon after Trump announced on Truth Social his intention to implement tariffs on "external product[s]," potentially including agricultural goods. This announcement added to the uncertainty surrounding the tariffs' impact, as there is no clear guidance from the administration on how they will be enforced. This ambiguity has left businesses and investors scrambling to assess potential consequences.
“Customers are pausing on new orders as a result of uncertainty regarding tariffs. There is no clear direction from the administration on how they will be implemented, so it’s harder to project how they will affect business,”
- One survey respondent
The Russell 2000 index, which tracks smaller companies, also fell by 2.25%. This decline coincided with a morning slide after investors received the latest manufacturing survey from the Institute for Supply Management. Notably, stocks such as Nvidia (NVDA) dragged down the market, with shares falling 7% in afternoon trading.
In addition to tariff concerns, WTI crude, the US benchmark for oil prices, fell 2.4% after OPEC announced plans to increase oil production in April. This decision further contributed to market instability, highlighting the interplay between geopolitical and economic factors impacting investor sentiment.
Amidst the turbulence in US markets, defense company shares in Europe soared to record highs. European leaders are considering the need to re-arm in response to reduced US support for Ukraine, driving significant interest in defense stocks across the continent.
“To the Great Farmers of the United States: Get ready to start making a lot of agricultural product to be sold INSIDE of the United States. Tariffs will go on external product on April 2nd. Have fun!”
- Trump
The yield on the 10-year Treasury slid to 4.18%, reflecting a cautious approach by investors seeking safer assets amid market volatility. Analysts suggest that US stocks may continue to experience volatility until Trump's policies align more closely with growth-focused objectives.
