Dow sinks, S&P 500 posts worst day of 2025 after Trump forges ahead on tariffs

Market losses accelerated but closed off the session lows on Monday after President Trump said there was “no room left” for negotiations with Canada and Mexico and tariffs against imports from those countries were set to go into effect on Tuesday.

The White House also indicated levies against China will be 20% as of Tuesday, an increase from the 10% tariffs implemented last month.

The S&P 500 (^GSPC) fell 1.7% to register its worst day of the year, while the tech-heavy Nasdaq Composite (^IXIC) dropped 2.2%. The Dow Jones Industrial Average (^DJI) dropped more than 600 points, or almost 1.5%.

Tech led the sell-off, with shares of Nvidia (NVDA) sinking more than 8%. Amazon (AMZN) sank 3%, while Tesla (TSLA) dropped 2%.

The threat of tariffs has weighed on the market, with hopes of another delay of levies against the US trading partners faded following the president’s comments.

“They’re all set. They go into effect tomorrow,” Trump said Monday afternoon.

Meanwhile, energy stocks declined on Monday as oil plummeted after the Organization of Petroleum Exporting Countries said the cartel would start adding some barrels back onto the market after roughly two years of production cuts.

Cryptocurrencies pared gains on Monday following a sharp rally in reaction to President Trump’s announcement on Sunday that five digital assets — bitcoin (BTC-USD), ether (ETH-USD), XRP (XRP-USD), solana (SOL-USD), and cardano (ADA-USD) — would be included in a new US strategic cryptocurrency reserve.

Prices for the tokens shot up before giving up some of their sharp gains booked following the President’s post on social media.

By Monday at around 3:15 p.m. ET, bitcoin was trading south of $86, 000, down from $95,000 immediately following the announcement.

The markets sank to session lows with Tech and Energy stocks leading the losses after President Trump said there was “no room left” for negotiations with Canada and Mexico and tariffs against imports from those countries would go forward on Tuesday.

Nvidia (NVDA), also weighed by reports of the tech giant’s AI chips reaching China despite export controls, dropped 9%.

The S&P 500 (^GSPC) fell more than 2% while the tech-heavy Nasdaq Composite (^IXIC) dropped more than 3%. The Dow Jones Industrial Average (^DJI) fell 1.9%.

Oil tumbled 2% to its lowest level of 2025, after the Organization of Petroleum Exporting Countries (OPEC) said it will restart some of its curbed production, while a report about sanctions relief for Russia also weighed on energy prices.

The decision to begin adding 138,000 barrels a day in April surprised market participants. Many Wall Street analysts expected the cartel would delay the unwinding of production cuts which began in 2023.

In recent years the US and other countries gained market share while OPEC reduced production in an effort to keep a floor on prices.

On Monday afternoonWest Texas Intermediate crude (CL=F) declined more than 2% to $68 per barrel. Brent futures (BZ=F) also dropped to trade near $71.

Shale producers will likely scale back new well production if oil continues its downward path given higher drilling costs said Ed Hirs, senior fellow at the University of Houston.

“Producers are going to be squeezed,” Hirs told Yahoo Finance. “The vast majority will not drill wells at WTI less than $70 per barrel.”

Meanwhile, a Reuters report on Monday afternoon indicated the White House was planning to possibly give Russia sanctions relief as it seeks to normalize ties with President Vladimir Putin.

Investors anxious for President Trump to return to his first-term playbook of tweeting about the stock market may have a long wait ahead of them.

While tariff talk has dampened equity prices in recent weeks, a growing number of Wall Street strategists point to Trump’s likely first order of business: lowering bond yields — even if it comes at the expense of a falling S&P 500 (GSPC).

“It’s reasonable to think that the index has to fall quite a bit more before Trump views it as a concerning signal,” UBS Financial Services’ Jason Draho wrote in a client note on Monday, noting the S&P 500 is sitting at a level below what it was on Inauguration Day but still higher than it was on Election Day.

“There’s also a strong case that the relevant Trump put right now is for Treasuries,” he wrote, arguing that “high inflation and rates at the start of Trump 2.0 favor policies that result in disinflationary growth, in contrast to reflation that was welcome during Trump 1.0.”

He added that the best indication of a Treasury put is that Trump himself has tweeted very little about stock market performance, instead posting more often about the debt ceiling and government spending.

“This leads to another conjecture, which is that the Trump Administration may not view slow growth due to higher tariffs and government spending cuts as a policy error, but rather as a necessary step to higher growth later on,” Draho wrote.

Gold rebounded from its worst week of the year as the US dollar (DX-Y.NYB) eased and buyers flocked to the safe-haven asset in anticipation of President Donald Trump implementing new tariffs.

On Monday, gold futures (GC=F) gained more than 1.5% to hover below $2,900. The precious metal rebounded from a loss of roughly 3% last week, when a strong US dollar weighed on the commodity.

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The major averages fell to session lows as selling intensified in afternoon trading on Monday and shares of Nvidia (NVDA) dropped 7%.

Nvidia stock sank after reports surfaced of the tech giant’s AI chips reaching China despite export controls.

The S&P 500 (^GSPC) fell 0.7% while the tech-heavy Nasdaq Composite (^IXIC) dropped more than 1.2%. The Dow Jones Industrial Average (^DJI) fell 0.6%.

Yahoo Finance’s Alexandra Canal reports:

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Yahoo Finance’s Laura Bratton reports:

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A string of weaker-than-expected economic data has led to sliding projections for first quarter economic growth.

On Monday, two separate releases showed activity in the manufacturing sector slowed in February while construction spending fell more than anticipated in January. The Atlanta Fed’s GDPNow tool, which uses already released data in the quarter to project the pace of US economic growth, now projects GDP fell by 2.8% in the first quarter, down from Friday’s projection of a 1.5% decline.

Economists at Oxford Economics also slashed their GDP estimate following this morning’s releases.

“The January figures of private construction have lowered our estimate of Q1 GDP to 0.6% annualized, down from 1% at the end of last week and well below the 2.5% penciled into the February baseline forecast,” Oxford Economics lead US economist Bernard Yaros wrote in a note on Monday.

Tesla stock (TSLA) rose 2% on Monday as Morgan Stanley analyst Adam Jonas said he sees shares of the EV giant rising to $430 as it diversifies into artificial intelligence and robotics.

Shares of the EV maker plummeted almost 28% in February as the company’s EV sales slumped, leaving investors to wonder whether CEO Elon Musk’s involvement in politics was turning off buyers.

Jonas predicted Tesla’s full-year 2025 deliveries could decline year over year, “creating an attractive entry point” for investors. The analyst reinstated Tesla as a top pick for the auto sector, with a price target of $430 (a roughly 50% increase from Friday’s close of $292.98) and a bull case of $800.

“Tesla’s softer auto deliveries are emblematic of a company in the transition from an automotive ‘pure play’ to a highly diversified play on AI and robotics,” he added.

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Crypto stocks rallied in early trading on Monday after President Donald Trump made new promises about a US crypto reserve planned by his administration.

In a post on Truth Social on Sunday, Trump identified five cryptocurrencies that the reserve will draw on — bitcoin, ether (ETH-USD), XRP (XRP-USD), solana (SOL-USD), and cardano (ADA-USD). In January, Trump issued an executive order to create a national crypto “stockpile” but did not name the digital assets included.

Shares of Strategy (MSTR) — the largest corporate holder of bitcoin formerly known as MicroStrategy — rose as much as 12% on Monday morning, but was last trading about 3% higher. Meanwhile, crypto miners Riot Platforms (RIOT) and MARA Holdings (MARA), the latter formerly known as Marathon Digital, both added around 3%. Trading platform provider Coinbase (COIN) climbed 1.5%.

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Yahoo Finance’s Ben Werschkul reports:

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Data out Monday showed activity in the manufacturing grew less than expected in February while costs increased.

The Institute for Supply Management’s manufacturing PMI registered a reading of 50.3 in February, down from January’s 50.9 reading and below the 50.7 economists had expected. Readings above 50 for this index indicate an expansion in activity, while readings below 50 indicate a contraction.

The prices paid index surged to 62.4, up from 54.9 the month prior, reflecting companies’ continuing increase in costs.

“Demand eased, production stabilized, and destaffing continued as panelists’ companies experience the first operational shock of the new administration’s tariff policy,” Institute for Supply Management Chair Timothy Fiore wrote in the release. “Prices growth accelerated due to tariffs, causing new order placement backlogs, supplier delivery stoppages and manufacturing inventory impacts. Although tariffs do not go into force until mid-March, spot commodity prices have already risen about 20 percent.”

Another reading on manufacturing activity out Monday also raised concern about President Trump’s policies. The final reading of S&P Global’s manufacturing PMI hit 52.7 in February, above 51.2 in January and its highest level since June 2022.

Despite the upbeat index reading for February, S&P Global Market Intelligence chief business economist Chris Williamson noted that respondents’ optimism for the year ahead is waning.

“Business optimism about the year ahead has consequently fallen compared to the buoyant mood evident in January, with February seeing an increase in the number of companies citing concerns over tariffs and other policies introduced by the new Trump administration,” Williamson said in the release.

Stocks opened higher on Monday as investors braced for President Trump’s targeted tariffs to come into force soon. The market will get key economic insight from Friday’s release of the monthly jobs report and from quarterly results from key retailers.

The S&P 500 (^GSPC) climbed 0.5%. while the tech-heavy Nasdaq Composite (^IXIC) rose about 0.8%. The Dow Jones Industrial Average (^DJI) was up 0.3%.

Investors expect tariffs on Mexico and Canada will be implemented on Tuesday, along with a doubling of levies on imports from China.

Wall Street will be closely watching the February jobs report due Friday. On the earnings front, results from Target (TGT), Costco (COST), and Kroger (KR) will offer more details about the state of the consumer.