United States equities declined on Monday (Tuesday AEST) after President Donald Trump released letters outlining new tariff rates on imported goods, and warned of further trade penalties in the coming days.
The Dow Jones Industrial Average dropped 422.2 points, or 0.9%, to finish at 44,406.4. The S&P 500 retreated 49.4 points, or 0.8%, to close at 6,230.0, while the tech-heavy Nasdaq Composite slipped 188.6 points, or 0.9%, to end the session at 20,412.5.
The declines followed a series of posts by President Trump on Truth Social, where he shared screenshots of signed letters addressed to leaders of multiple countries announcing new tariffs on their exports to the United States.
Among the targeted nations were South Korea, Japan, Malaysia, Kazakhstan, South Africa, Thailand, Laos, Indonesia and Myanmar.
According to White House press secretary Karoline Leavitt, a total of 14 letters would be sent on Monday, with more to follow in the coming days.
She also confirmed that President Trump would sign an executive order to delay the new tariff enforcement date until August 1.
The markets were further rattled by the prospect of additional trade barriers. Trump warned of a possible 10% tariff hike on any country “aligned with the Anti-American policies of BRICS”, referring to the economic bloc made up of Brazil, Russia, India, China and South Africa.
The announcement coincided with a BRICS summit in Rio de Janeiro.
Automotive stocks bore the brunt of the sell-off, with General Motors down 2%, Ford losing 1.9% Toyota Motor plunging 4%, and Honda Motor sliding 3.9%.
The trade developments mark the first in what officials say will be a series of announcements. Treasury Secretary Scott Bessent told CNBC’s Squawk Box on Monday that the administration expects several trade-related policy updates within the next 48 hours. “It’s going to be a busy couple of days,” Bessent said.
Further weighing on investor sentiment was a steep drop in Tesla, down 6.8% after CEO Elon Musk revealed plans to form a new political organisation, the “America Party”.
The move drew renewed scrutiny from investors, many of whom have voiced concerns that Musk’s political engagements have negatively impacted Tesla’s public image and distracted from the company’s core business.
On the bond markets, the yield on the 10-year Treasury note rose 0.8% to 4.383%, while the 2-year yield added 0.3% to 3.897%.
