Wall Street Sinks 2.6% After Canada-Mexico Tariff News
The U.S. President’s economic policies continue to roil global markets, fueling volatility. After a brief rebound on Friday, stocks fell again following Trump’s tough stance on tariffs.
On Monday, U.S. equities declined as investors digested new manufacturing data and remained cautious ahead of the looming tariff deadline. Major stock indexes have suffered sharp losses since February, mainly due to market turmoil triggered by Trump’s trade policies and shifting expectations in the tech sector regarding artificial intelligence.
Trump confirmed that he will impose 25% tariffs on Canada and Mexico starting tomorrow, insisting that their governments have “no room” for negotiation. Market volatility surged after Trump contradicted Commerce Secretary Howard Lutnick, who had earlier stated that the White House was still deliberating on the tariffs. Instead, Trump asserted that the tariffs are finalized and will take effect as planned.
Market Impact
- Dow Jones Industrial Average: -1.48%, closing at 43,191.24 points
- S&P 500: -1.76%, finishing at 5,849.72 points
- Nasdaq Composite: -2.64%, dropping to 18,350.19 points
PMI and ISM Data in Focus
According to the Project Management Institute (PMI) and the Institute for Supply Management (ISM), U.S. manufacturing activity remained relatively stable in February. However, input costs surged, and new orders declined, as companies assessed the impact of Trump’s tariff policies.
Economists warn that the tariffs could strengthen the U.S. dollar, potentially hurting the global competitiveness of American-made goods.
Earnings Estimates Decline
With the corporate earnings season nearly complete, Wall Street analysts have lowered first-quarter earnings projections for S&P 500 companies. According to FactSet Research, earnings estimates for Q1 have dropped 3.5% in the first two months of the year.
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