Wall Street: Trump's tariff letters undo what US job data, Big Beautiful Bill achieved last week

Wall Street stocks fell on Monday, pulling back from record highs after President Donald Trump announced new tariff threats, reigniting worries about trade tensions.

The S&P 500 and Nasdaq had hit record levels last week, boosted by strong US jobs data and the passage of Trump’s major fiscal package that extended tax cuts.

However, Trump said he plans to impose 25 per cent tariffs on Japan and South Korea if they don’t reach trade deals with Washington. He also warned of a possible 10 per cent tariff on countries siding with the emerging BRICS bloc. These threats rattled investors, who are already concerned that stock prices might be too high.

The Dow Jones Industrial Average dropped 0.9 per cent to 44,406.36. The S&P 500 fell 0.8 per cent to 6,229.98, while the tech-heavy Nasdaq lost 0.9 per cent to close at 20,412.52.

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Tesla shares plunged 6.3 per cent after Trump criticised CEO Elon Musk for planning to launch a new political party opposing the president’s signature legislation known as the “Big Beautiful Bill.” The clash between Trump and Musk added uncertainty for investors, who had hoped Musk would focus more on running Tesla and his other businesses instead of getting involved in politics.

Trade tensions had taken a back seat recently as Congress debated Trump’s fiscal plans, which include controversial cuts to healthcare and social programs. Meanwhile, the conflict between Iran and Israel also diverted attention from trade.

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But trade issues were bound to resurface, especially after the White House set a July 9 deadline for new trade deals. The administration now says it will raise tariffs on August 1 for trading partners that fail to reach agreements.