WASHINGTON (dpa-AFX) - After showing a lack of direction early in the session, stocks moved sharply lower over the course of the trading day on Monday. The major averages all showed significant moves to the downside, with the tech-heavy Nasdaq plunging to a four-month closing low.
The major averages climbed off their worst levels going into the close but remained firmly negative. The Nasdaq dove 497.09 points or 2.6 percent to 18,350.19, the S&P 500 tumbled 104.78 points or 1.8 percent to 5,849.72 and the Dow slumped 649.67 points or 1.5 percent to 43,191.24.
The substantial weakness that emerged on Wall Street came amid concerns about the economic impact of President Donald Trump's proposed tariffs.
During an appearance on Fox News over the weekend, Commerce Secretary Howard Lutnick described the proposed 25 percent tariffs on imports from Mexico and Canada as 'fluid' but said the additional 10 percent tariff on imports from China is 'set.'
Trump later clarified that the 25 percent tariffs on imports from Mexico and Canada will take effect tomorrow and reciprocal tariffs on other U.S. trade partners will be imposed on April 2nd.
On the U.S. economic front, the Institute for Supply Management released a report showing its reading on U.S. manufacturing activity edged slightly lower in February but still indicated growth in the sector for the second straight month.
The ISM said its manufacturing PMI slipped to 50.3 in February after rising to 50.9 in January, although a reading above 50 still indicates growth. Economists had expected the index to dip to 50.5.
The report also said the prices index surged to 62.4 in February from 54.9 in January, reflecting the largest month-over-month increase since January 2024.
'Prices growth accelerated due to tariffs, causing new order placement backlogs, supplier delivery stoppages and manufacturing inventory impacts,' said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.
He added, 'Although tariffs do not go into force until mid-March, spot commodity prices have already risen about 20 percent.'
A separate report released by the Commerce Department showed construction spending in the U.S. unexpectedly edged modestly lower in the month of January,
Sector News
Computer hardware stocks extended the sharp pullback seen over the past couple weeks, dragging the NYSE Arca Computer Hardware Index down by 4.2 percent to its lowest closing level in a month.
A steep drop by the crude oil also weighed on oil producer stocks, as reflected by the 4.1 percent nosedive by the NYSE Arca Oil Index. The index ended the session at a two-month closing low.
Semiconductor stocks also moved sharply lower over the course of the session, resulting in a 4.0 percent slump by the Philadelphia Semiconductor Index.
Networking, airline and retail stocks also saw considerable weakness on the day, moving lower along with most of the other major sectors.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index shot up by 1.7 percent, while Hong Kong's Hang Seng Index rose by 0.3 percent.
The major European markets also showed strong moves to the upside on the day. While the German DAX Index surged by 2.6 percent, the French CAC 40 Index jumped by 1.1 percent and the U.K.'s FTSE 100 Index climbed by 0.7 percent.
In the bond market, treasuries moved higher, extending a recent upward trend. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell 5.1 basis points to a nearly three-month closing low of 4.180 percent.
Looking Ahead
Amid a lack of major U.S. economic data, trading on Tuesday is likely to be driven by reaction to the latest news about Trump's tariffs on Mexico and Canada.
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