US stocks retreat from records on Trump tariffs
Major US indices fell from record highs after Donald Trump announced new tariff levels against trading partners such as Japan and South Korea. Photo: Reuters
Wall Street's major indexes closed sharply lower on Monday, after US President Donald Trump announced hefty tariffs against Japan, South Korea and other trading partners while Tesla shares sank after CEO Elon Musk said he was forming a new US political party.
Indexes added to losses after Trump announced the tariff rates against Japanese and South Korean imports, due to take effect on August 1.
Stocks wobbled further in the late afternoon when he announced hefty tariffs on Malaysia, Kazakhstan, South Africa, Laos and Myanmar.
Last week, both the Nasdaq and the S&P 500 ended three sessions with record high closes. The latest record finishes came on Thursday after a robust jobs report.
"Markets had been telling us that peak tariff risk is behind us, but to have tariffs back in the forefront is causing some skittishness," said Emily Roland, co-chief investment strategist at Manulife John Hancock Investments in Boston.
"Investors were getting to that period of ebullience in markets and we're taking a little step back from that."
But investors likely have some hopes the announcements are not permanent, she said: "That's the pattern we've been in, announcing punitive tariffs and then dialing that back a little bit. That could certainly be the next phase of this back and forth negotiation."
The Dow Jones Industrial Average fell 422 points, or 0.9 percent, to 44,406, the S&P 500 lost 49 points, or 0.8 percent, to 6,229 and the Nasdaq Composite lost 188 points, or 0.9 percent, to 20,412.
The S&P 500's biggest drag came from shares of electric vehicle maker Tesla, which dived 6.8 percent, after CEO Musk announced formation of a new political party named the "America Party", further escalating his feud with Trump.
It was Tesla's biggest daily slide since June 5, and its lowest closing level since that session.
Investors also awaited other US trade announcements after Trump said on Sunday that the US was on the cusp of several deals and would notify other countries of higher tariffs by July 9, with new duties to take effect on August 1.
On Monday, Trump threatened an extra 10 percent tariff on countries aligning themselves with the "Anti-American policies" of the Brics group of Brazil, Russia, India, China and South Africa. (Reuters)
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