Stocks fell sharply Monday to kick off March on a low note as market participants brace for the start of President Donald Trump's tariff policies on major trading partners. The Dow Jones Industrial Average dropped nearly 650 points to mark its worst trading day since December, while the S&P 500 Index and Nasdaq Composite lost about 1.8% and 2.7%, respectively.
Here's how the market settled on Monday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
The broader market plunged lower in afternoon trading on Monday after Trump confirmed that 25% tariffs on imports from Mexico and Canada would go into effect on Tuesday. Trump also signed an action to impose an additional 10% duty on China, and reiterated that reciprocal tariffs on other trading partners would begin on April 2.
"I would just say this to people in Canada or Mexico: if they're going to build car plants, the people that are going them are much better off building here, because we have the market where they sell the most," Trump told reports at the White House on Monday, encouraging car manufacturers to move production into the United States in response to the tariffs.
Tariffs are taxes paid on foreign goods by importers, which analysts warn could lead to higher prices for U.S. consumers.
"To the Great Farmers of the United States" Get ready to start making a lot of agricultural product to be sold INSIDE of the United States. Tariffs will do on external product on April 2nd. Have fun!," Trump wrote in a post on Truth Social on Monday, setting the stage for a larger domestic supply chain ahead of multiple harvests.
The session's weakness built on February's rout, with all three major averages falling lower throughout the month on concerns over persistent inflation and geopolitical concerns. The Dow and S&P 500 each fell more than 1%, while the Nasdaq Composite posted its worst month since April 2024, falling 4% as investors pulled out of growth stocks.
U.S. Manufacturing Activity eased slightly in February, the Institute for Supply Management's monthly manufacturing index showed Monday, but price data beneath the headline rose to nearly a three-year high as manufacturers surveyed expect tariffs to impact near-, medium- and long-term production.
Headline activity data registered a reading of 50.3, down 0.6 percentage points from January and slightly below estimates; reading above the neutral level of 50 indicates growth in a sector. Elsewhere in the survey, the prices index jumped 7.5 points to 62.4, the new orders index fell to 48.6, declining 6.5 points month-to-month, and the employment index dropped to 47.6.
"Clearly, tariffs will impact the manufacturing sector harder than the overall economy, but the prospect of sharp tariff hikes is clearly going to be bad for the economy, and the unpredictability on this issue over the last few months makes things even worse," said Stephen Stanley, chief U.S. economy at Santander U.S. Capital Markets, quoted by Reuters.
Looking Ahead, market participants are gearing up for earnings reports from Target
