Stocks attempted to gain some ground on Monday after Friday's steep sell-off, but mostly slipped lower after an update to President Donald Trump's trade war against Mexico and Canada dimmed market optimism. The Dow Jones Industrial Average rose about 30 points, after rising as much as 250 points earlier in the session, while the broader market S&P 500 Index lost 0.5% and the tech-heavy Nasdaq Composite sank 1.2%.
Here's how the market settled on Monday:
S&P 500 Index (NYSE: SPY): -0.50% or -29.87 points to 5,983.26
Dow Jones Industrial Average (NYSE: DIA): +0.08% or +33.19 points to 43,461.21
Nasdaq Composite Index (NASDAQ: QQQ): -1.21% or -237.08 points to 19,286.92
Trump said Monday that U.S. tariffs on imports from major trading partners Canada and Mexico "will go forward," at the end of this week, implementing the proposed 25% tariffs after a month-long pause.
Wall Street's recent momentum came under pressure last week as economic data for February sparked pessimism over the health of the U.S. economy. On Friday, the Dow plunged more than 700 points, and the S&P 500 and Nasdaq lost 1.7% and 2.2%, respectively. The session's weakness led the Dow and Nasdaq each to fall over 2% for the week, while the S&P 500 lost more than 1%.
Adding to the uncertainty, Bank of America economists led by Aditya Bhave wrote in a Monday note that "stagflation" risks are growing, referring to an environment of high inflation, slow economic growth and high levels of unemployment, due to "growth-negative policies," like deportations of undocumented workers, federal job cuts, potential high tariffs on imports, and "a growing risk that fiscal stimulus will be modest and delayed."
"In our forecast, growth slows but remains at or above trend this year (in the low 2[%]). Inflation picks up by a few tenths, mainly because of tariffs, but stays below 3%," the economists wrote, adding that if growth stalls or inflation accelerates too much, "Republicans are likely to dial back on tariffs, spending cuts and immigration restrictions."
In the News:
Apple (NASDAQ: AAPL) announced plans Monday to invest more than $500 billion in the United States in effort to boost its artificial intelligence infrastructure. The investment plan also includes expanding its workforce by 20,000 positions over the next four years.
"We are bullish on the future of American innovation, and we're proud to build on our longstanding U.S. investments with this $500 billion commitment to our country's future," CEO Tim Cook said in a statement.
Starbucks (NASDAQ: SBUX) announced Monday it will eliminate 1,100 corporate positions as part of its effort to streamline operations. The coffee chain also plans to halt "several hundred" open and unfilled job positions.
"Our intent is to operate more efficiently, increase accountability, reduce complexity and drive better integration," CEO Brian Niccol said in a statement to corporate employees. "All with the goal of being more focused and able to drive greater impact on our priorities."
Berkshire Hathaway (NYSE: BRK.A) shares rose Monday after the conglomerate reported strong operating earnings in its recent quarter, soaring 71% to $14.5 billion as insurance underwriting profits jumped 302% year-over-year to $3.4 billion. The company's cash pile also grew to another record in the fourth-quarter, $334.2 billion, up from $325.2 billion in its third-quarter.
"Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities," CEO Warren Buffett wrote in his annual letter to shareholders. "That preference won't change."