The S&P 500 fell on Monday, extending February’s decline and hitting red for the year, following President Donald Trump’s confirmation of upcoming tariffs.
The broad index lost 1.76% to 5,849.72, its worst day since December and a year-to-date loss of almost 0.5%. The Dow Jones Industrial Average fell 649.67 points, or 1.48%, to close at 43,191.24. The Nasdaq Composite fell 2.64% to 18,350.19, with Nvidia losing more than 8% of its value.
Stocks fell sharply in afternoon trade after President Trump reiterated that 25% tariffs on imports from Mexico and Canada would go into effect on Tuesday, crushing investors’ hopes for a last-minute compromise to avoid the full tariffs on the two US allies. All three indices were in positive territory earlier in the day, with the Dow surging over 200 points to session highs.
“No room left for Mexico or for Canada,” Trump said alongside Commerce Secretary Howard Lutnick from the White House. “Reciprocal tariffs start on April 2 … but very importantly, tomorrow, tariffs, 25% on Canada and 25% on Mexico … will start.”
According to an administration official, Trump also signed an order imposing an additional 10% duty on China.
A risk-off move occurred, affecting everything from technology to small caps. In addition to Nvidia, Broadcom and Super Micro Computer, who were once popular AI companies, have also experienced declines. The Russell 2000 index, which focuses on small-cap stocks, fell nearly 3%.
Stocks expected to be hurt directly by tariffs or retaliation from the designated countries also declined. Following Trump’s statements, GM and Ford had their lowest levels of the session. iShares exchange-traded funds tracking Mexico and Canada declined by more than 1% apiece.
“Whether the stock market can survive this change remains to be seen,” Chris Rupkey, chief economist at FWDBONDS, said in a note. “One way or another, tariffs will be a shock for the economy.”
Monday’s sell-off to start March comes after the three major indexes lost ground in February, owing primarily to concerns about the impact of tariffs and early signs of a slowing economy. The Dow and S&P 500 both fell more than 1% in February, while the tech-heavy Nasdaq Composite experienced its worst month since April 2024, with a 4% drop.
Soft economic data for the manufacturing and construction sectors reported Monday provided the latest reasons to be concerned about the state of the US economy. These announcements kick off a busy week for economic statistics, which will be topped by the February jobs report, which is scheduled for Friday.
