U.S. stocks close lower as Trump plans tariffs on Japan, South Korea
The Dow Jones Industrial Average fell 422.17 points, or 0.94 percent, to 44,406.36. The S&P 500 sank 49.37 points, or 0.79 percent, to 6,229.98. The Nasdaq Composite Index shed 188.59 points, or 0.92 percent, to 20,412.52.
Nine of the 11 primary S&P 500 sectors ended in red, with consumer discretionary and materials leading the laggards by losing 1.26 percent and 1.04 percent, respectively. Meanwhile, utilities and consumer staples led the gainers by rising 0.17 percent and 0.11 percent, respectively.
Markets opened lower and continued the downward trend during trading after U.S. President Donald Trump posted letters on social media addressed to the leaders of South Korea and Japan, saying that 25-percent tariffs will be imposed on imports from both countries beginning Aug. 1. He also announced tariff rates for many other countries in similar letters.
U.S. Treasury Secretary Scott Bessent confirmed Sunday that the United States would begin notifying trading partners of specific tariff rates, but emphasized that formal implementation wouldn't begin until next month. He added that talks with 18 major partners were underway and hinted at potential breakthroughs in the coming days.
"We're down (in stocks) after the long weekend, and it's somewhat of a critical week in terms of the tariffs," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
Technology stocks led the pullback after the news, with Tesla sliding 6.79 percent as tensions flared again between its CEO Elon Musk and Trump. "Very simply Musk diving deeper into politics and now trying to take on the Beltway establishment is exactly the opposite direction that Tesla investors/shareholders want him to take," Wedbush analyst Dan Ives wrote. "After leaving the Trump Administration and DOGE there was initial relief from Tesla shareholders and big supporters... That relief lasted a very short time and now has taken a turn for the worst with this latest announcement."
Apple and Alphabet both dropped nearly 1.7 percent, while Nvidia, Microsoft, Meta Platforms and Broadcom posted more modest declines. Amazon edged higher, bucking the broader trend.
Investors are also turning their attention to the second-quarter earnings season, which unofficially kicks off on Thursday with results from Delta Air Lines. Analysts are watching closely for signs of how corporate profits are holding up in the face of trade tensions and geopolitical risk.
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