S&P 500 Crash | On Monday, the S&P 500 dropped 1.76%, bringing its year-to-date performance down by 0.5%. The Dow Jones fell 649.67 points (1.48%) to close at 43,191.24, while the Nasdaq slid 2.64% to 18,350.19. This decline followed U.S. President Donald Trump’s confirmation of a 25% tariff on imports from Mexico and Canada.

Trump’s Big Announcement: 25% Tariff on Mexico and Canada Begins

President Donald Trump announced on Monday that a 25% import tariff would take effect starting Tuesday. He stated, “No room left for Mexico or Canada.” Additionally, he signed an action imposing an extra 10% duty on China. This news triggered investor panic, leading to a sharp market sell-off.

Tech Stocks Hit Hard: Nvidia Plunges Over 8%

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Nvidia shares dropped over 8%, dragging the Nasdaq Composite down by 2.64%. Other major tech stocks, including Broadcom and Super Micro Computer, also declined. The small-cap Russell 2000 index fell nearly 3%, reflecting broader market weakness.

Auto Sector Under Pressure: GM and Ford Stocks Tumble

The tariff news hit the auto sector hard. General Motors (GM) and Ford hit their session lows following Trump’s comments. Additionally, iShares exchange-traded funds (ETFs) tracking Mexico and Canada dropped over 1%.

S&P 500 Crash, Market Uncertainty: Can Stocks Recover?

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The market had already been struggling, as major indexes posted losses in February. Both the Dow and S&P 500 declined over 1%, while the Nasdaq had its worst month since April 2024, falling 4%.

Economic Slowdown Signs: Weak Manufacturing and Construction Data

Weak manufacturing and construction sector data released on Monday further fueled economic concerns. FWDBONDS Chief Economist Chris Rupkey stated, “Tariffs could be a shock to the economy.”

What’s Next: Key Jobs Report Due Friday

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Investors are now eagerly awaiting the February jobs report set to be released on Friday, which could influence market direction.

Conclusion

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Trump’s tariff announcement has led to a sharp sell-off in U.S. markets. Stocks of major companies like Nvidia, GM, and Ford took significant hits. Investors will now watch for economic data and the real impact of these tariffs in the coming weeks.

Frequently Asked Questions (FAQs)

1. Why did the S&P 500 drop significantly?

The S&P 500 fell 1.76% due to market uncertainty following President Donald Trump’s announcement of a 25% tariff on Mexico and Canada, along with a 10% duty on China. Read more on Bloomberg.

2. How do tariffs impact the stock market?

Tariffs increase the cost of imported goods, leading to higher prices for consumers and businesses. This can reduce corporate profits and trigger market sell-offs. Learn more about tariffs on Investopedia.

3. Which sectors were most affected by Trump’s tariff announcement?

The technology sector and automotive sector were hit the hardest. Nvidia dropped over 8%, while GM and Ford stocks also tumbled. Check stock market updates on CNBC.

4. Will the market recover after this decline?

Market recovery depends on economic data, investor sentiment, and potential policy changes. The upcoming February jobs report could provide further insights. Follow the latest market trends on Reuters.

5. How do tariffs affect consumer prices?

Tariffs lead to higher costs for imported goods, which can result in inflationary pressures and increased prices for everyday products. Find out more on the U.S. Chamber of Commerce.