The United States stock market suffered a sharp sell-off on Monday, with the Dow Jones Industrial Average plunging more than 600 points and the S&P 500 posting its biggest single-day loss since December, as Trump confirmed that tariffs on Mexico and Canada would proceed as planned.
The Dow declined 649.67 points, or 1.5%, to 43,191.2, the S&P 500 fell 104.8 points or 1.8% to 5,849.7, while the Nasdaq Composite tumbled 497.1 points or 2.6% to 18,350.2.
Markets initially opened higher, with the Dow up nearly 200 points at session highs. However, stocks reversed sharply in afternoon trading after Trump reiterated that the 25% levies on imports from Mexico and Canada would take effect on Tuesday.
“No room left for Mexico or for Canada,” Trump stated alongside Commerce Secretary Howard Lutnick at the White House.
Additionally, Trump signed an order imposing a further 10% tariff on Chinese imports, an administration official confirmed.
The market reaction was swift, with a broad sell-off hitting major sectors, particularly technology stocks and small caps.
Nvidia’s 8.7% decline weighed on the Nasdaq, while other AI-related stocks such as Broadcom and Super Micro Computer also suffered steep losses of 6.1% and 13%, respectively.
Analysts at ANZ noted in a report: "U.S. equity markets softened amid weak data, while European equities were at record highs. The latter boosted by the prospect of increased EU defence spending after France’s President Macron called on EU member states to increase defence spending to 3-3.5% of GDP.
"He suggested raising the funding through joint borrowing or even the European Stability Mechanism and anticipates needing €200 billion initially. Later this week, EU leaders will hold an emergency summit on defence and Ukraine."
On the bond markets, 10-year and 2-year rates were 1% and 0.7% lower at 4.161% and 3.958%, respectively.
