Traders carry out their work on the trading floor of the New York Stock Exchange in New York on Thursday, February 27, 2025. (AP Photo/Seth Wenig)
U.S. stock markets plunged on Monday as President Donald Trump announced that tariffs on Canada and Mexico would take effect within hours. Investors had hoped for a compromise, but Trump stated there was no room for negotiation. This announcement erased more of the market gains made since his election, sparking fresh concerns about economic stability.
The S&P 500 fell 1.8%, dragging its post-election rally down to just over 1%, compared to its previous peak of more than 6%. The Dow Jones Industrial Average plummeted 649 points (1.5%), while the Nasdaq composite dropped 2.6%. The losses came after a turbulent few weeks for Wall Street, which had initially soared on strong corporate earnings but later stumbled due to weak economic reports and rising concerns over inflation.
Economic Worries Intensify
The latest blow came from a report on U.S. manufacturing, which showed slower-than-expected growth. While the industry is still expanding, new orders are declining, and prices are rising as companies adjust to Trump’s tariff policies. Timothy Fiore, chairman of the Institute for Supply Management’s survey committee, noted that businesses are struggling with the first major impact of these tariffs.
Wall Street had hoped that Trump’s tariff threats were just a bargaining tactic. But his decision to move forward with Canadian and Mexican tariffs dashed those expectations, leaving investors uncertain about the future.
Tech Stocks and Crypto Hit Hard
High-profile tech companies took a beating, with Nvidia plunging 8.8% and Tesla losing 2.8%. Even the cryptocurrency sector, which had rallied earlier in the day, saw losses. MicroStrategy, a firm heavily invested in Bitcoin, slid 1.8%, while crypto trading platform Coinbase fell 4.6%.
CEO Resignation Shakes Kroger
Adding to the market turmoil, Kroger’s stock dipped 3% following the resignation of its CEO Rodney McMullen, who stepped down after an internal investigation into his personal conduct.
Global Markets React
While U.S. stocks tumbled, China’s manufacturing sector saw a spike in orders as buyers rushed to get ahead of Trump’s tariffs. However, Beijing is reportedly considering countermeasures. Meanwhile, Hong Kong’s Mixue Bingcheng, a popular bubble tea chain, saw its stock soar 43% on its market debut.
European markets surged after a report suggested inflation was easing, raising hopes for an interest rate cut by the European Central Bank. Germany’s DAX jumped 2.6%, and France’s CAC 40 climbed 1.1%.
Bond Yields Fall Amid Slowdown Fears
In the bond market, the 10-year Treasury yield slipped to 4.16% from 4.24%, reflecting concerns over slower economic growth. Typically, falling yields support stock prices, but analysts warn that this decline signals deeper worries about the economy.
