Wall Street stocks plummeted on Monday, joining international equity markets in a downward spiral after US President Donald Trump launched trade wars against Canada, Mexico, and China. The tariffs have sparked fears of prolonged or worsened inflationary pressures, potentially hitting economic growth.
As of 25 minutes into trading, the Dow Jones Industrial Average had dropped 1.4% to 43,904.26, while the S&P 500 fell 1.7% to 5,935.92. The Nasdaq Composite Index took a hit, slumping 2.1% to 19,224.64.
Analysts are scrambling to determine whether Trump’s tariff actions are a temporary negotiating tactic or a permanent feature. “The quandary for the capital markets is figuring out if these tariff actions are a temporary negotiating tactic or a permanent feature,” said analyst Patrick O’Hare. Trump’s announcement has “ramped up a feeling of uncertainty that is weighing on market sentiment,” O’Hare added.
The tariffs have raised concerns about the potential impact on global trade and economic growth. Investors are worried that the tariffs could lead to retaliatory measures from the affected countries, sparking a full-blown trade war.
This week, markets will be closely watching talks between Washington and the three targeted countries, as well as quarterly earnings from major players like Google parent Alphabet and Ford. The January US jobs data will also be a key focus.
As the situation continues to unfold, investors will be keeping a close eye on any developments that could impact the markets. One thing is certain – the tariffs have introduced a new level of uncertainty into the markets, and it remains to be seen how things will play out.
