 "A Wall Street sign hangs in front of a US Flag outside the New York Stock Exchange (NYSE) in New York City, US, September 18, 2024. File Photo/Reuters")
US stocks closed sharply lower Monday (March 3) after President Donald Trump confirmed that tariffs on Mexico and Canada would take effect Tuesday (March 4), rattling investors already on edge over trade tensions.
The Dow Jones Industrial Average fell 1.5 per cent to 43,191.24, while the S&P 500 lost 1.8 per cent to close at 5,849.72. The Nasdaq Composite saw a steeper decline, dropping 2.6 per cent to 18,350.19.
Trump’s tariff threat
“The tariffs, you know, they’re all set, they go into effect tomorrow,” Trump said at the White House on Monday when asked whether the levies were moving forward. “No room left for Mexico or for Canada ."
“Markets were looking for another 11th hour deal to further delay tariffs, but aren’t going to get one this time,” said Jamie Cox, managing partner at Harris Financial Group.
“The threat of tariffs has run its course for now, so the next phase is to endure them. Markets have to price that reality, and those numbers are painted red.”
Then there’s also the possibility of a trade war with China , given that the additional 10 per cent ‘Trump tariffs’ are bound to come into effect in just about an hour’s time. Beijing has promised retaliation.
Tech stocks take a hit
Technology stocks took a hit, with chip giant Nvidia tumbling 8.7 per cent after Singaporean authorities launched an investigation into whether servers containing its chips, supplied to Malaysia, may have violated US export restrictions on China.
The servers were reportedly provided by US firms Dell and Super Micro Computer to companies in Singapore, according to Singapore’s Interior Minister K. Shanmugam.
Super Micro’s shares plunged 13 per cent, while Dell lost 7 per cent.
Chipmaker Intel closed lower by 4 per cent, erasing gains that came in early trade after a report that chip designers Nvidia and Broadcom were running manufacturing tests with the company.
Impact Shorts
More ShortsThe CBOE Volatility Index, Wall Street’s so-called “fear gauge,” spiked to its highest level since December.
Despite the sell-off, some analysts maintained that market conditions remained relatively stable. “The backdrop remains a favorable one,” Angelo Kourkafas of Edward Jones told AFP, adding that Monday’s decline was in line with recent market volatility.
With inputs from agencies