US Stocks Tumble as Trump Escalates Tariffs
US stocks are declining on Monday following President Donald Trump’s swift implementation of new tariffs, while investors persist in penalising companies that may face challenges in the artificial-intelligence revolution. The S&P 500 declined by 0.8 percent following Trump’s announcement on Saturday regarding the imposition of temporary 15 percent tariffs on other nations. That’s an increase from the 10 percent rate he had announced on Friday, following a Supreme Court ruling that invalidated his extensive “reciprocal” taxes on imports from across the globe. The Dow Jones Industrial Average experienced a decline of 659 points, equating to a 1.3 percent drop, as of 1:25 pm. As of Eastern time, the Nasdaq composite experienced a decline of 0.9 percent. Trump’s rapid pivot to more aggressive tariffs highlights the significant uncertainty that continues to loom over the global economy, despite the Supreme Court’s ruling that the president did not possess the legal authority to implement his extensive “reciprocal” tariffs. In addition to a 15 per cent tariff that may endure for as long as 150 days, pending Congressional extension, Trump is advancing on other fronts to implement more enduring tariffs on various countries and industries. This situation has left trading partners around the globe feeling uneasy. South Korea’s trade minister, Kim Jung-kwan, stated on Monday that uncertainty could escalate if the Trump administration persists in imposing new tariffs through alternative legal frameworks.
Indeed, the market movements on Monday were not nearly as severe as the widespread panic that engulfed the globe in April, following Trump’s initial announcement of his “Liberation Day” tariffs. The value of the US dollar dipped slightly against other currencies on Monday, while bitcoin experienced a brief decline below USD 65,000, yet stayed above the low point it reached earlier this month. Gold continued to rise, bolstered by its reputation as a safer asset during uncertain times. Investors might be perceiving that it will require considerable time, along with additional legal disputes, before a clearer picture of global trade emerges. Stocks received a lift on Friday following the Supreme Court’s tariff ruling, but it soon became evident that the decision would merely usher in a new chapter in the ongoing trade saga, rather than bring it to a close,” stated Chris Larkin. On market, significant losses impacted companies facing scrutiny for being undermined by AI-driven competitors. Recently, investors have been sharply and suddenly punishing the stocks of such companies. CrowdStrike experienced a decline of 9.7 per cent, resulting in a cumulative loss of 25 per cent for the year to date. A new tool from Anthropic that scans codebases for security vulnerabilities and suggests targeted software patches for human review is impacting stocks across the cybersecurity industry. AppLovin experienced a decline of 9 per cent. It stands as one of the software companies affected by concerns that AI competition will attract customers and fundamentally transform their industries. Significant developments could be on the horizon for market this week, especially with Nvidia’s profit report set to be released on Wednesday.
Concerns are mounting that firms such as Alphabet and Amazon might be investing heavily in Nvidia’s chips to the extent that they may struggle to recover their expenditures through increased productivity and future earnings. In other developments on market, airline stocks experienced a decline as severe snow and strong winds led to the cancellation of thousands of flights throughout the bustling Northeast. United Airlines experienced a decline of 4.3 per cent, American Airlines saw a drop of 4.5 per cent, and Delta Air Lines decreased by 3.6 per cent. Novo Nordisk’s stock, which is traded in the United States, fell by 16.1 per cent after the Danish drugmaker announced that a trial for its CagriSema drug indicated that participants lost a smaller percentage of weight compared to a similar drug produced by rival Eli Lilly. Eli Lilly experienced an increase of 4.7 percent. In international stock markets, indexes experienced a decline in Europe. The stocks had risen on Friday following the Supreme Court’s ruling.
In Asia, where markets had their first opportunity to respond to the court’s ruling, Hong Kong’s Hang Seng surged by 2.5 percent, while South Korea’s Kospi experienced a more modest increase of 0.6 percent. Markets in Japan and mainland China were closed for holidays. The yield on the 10-year Treasury in the bond market decreased to 4.03 percent, down from 4.08 percent late Friday. A senior official at the Federal Reserve stated on Monday that it’s “a coin flip” regarding whether the Fed will reduce its primary interest rate at the upcoming meeting in March or maintain the current rate once more. The remarks from the Federal Reserve. Gov. Christopher Waller represents a significant change from January, when he was among the two Fed governors who dissented against the central bank’s choice to maintain its key rate after three rate cuts at the end of the previous year. Reduced rates would provide a significant uplift to the economy, and Trump has been vocally advocating for them. However, they may also exacerbate inflation.
