US Stocks-Wall Street Closes Lower as Trump Sets 25% Tariffs, Manufacturing Data Dips – Market News
Markets Plummet as Trump Imposes Tariffs on Canada and Mexico, Ex-US Manufacturing Data Suffers Stark Dip
Wall Street’s main stock indexes closed sharply lower on Monday, with the S&P 500 posting its biggest daily percentage decline since December 18, following President Donald Trump’s announcement of a 25% tariff on Canada and Mexico, effective from Tuesday, with reciprocal tariffs set to start on April 2. The news spooked investors, who had been hoping for a last-minute reprieve from the tariffs.
What’s the Impact of Tariffs on the Market?
As Jamie Cox, managing partner at Harris Financial Group, noted, "Markets were looking for another 11th hour deal to further delay tariffs, but aren’t going to get one this time. The threat of tariffs has run its course for now, so the next phase is to endure them. Markets have to price that reality, and those numbers are painted red."
Manufacturing Data Suffers a Slump
The ISM survey revealed a significant dip in manufacturing PMI to 50.3 in February, down from 50.9 in January, while the forward-looking new orders index contracted to 48.6 in February from 55.1 in January. This mirrored declines in other sentiment measures, as investors grew increasingly concerned about the potential impact of tariffs on the US manufacturing sector.
What’s Causing the Market Volatility?
"The ISM survey showed softening demand, indicating that there’s likely to be a slowdown in the economy," said James St. Aubin, chief investment officer at Ocean Park Asset Management in Santa Monica, California. "It’s just more of a continuation of a string of bad economic news that tends to put a little bit of a dampener on the optimism we saw from the fourth quarter earnings, which were pretty good."
Sector-Wise Performance
Energy and technology sectors led the declines, with most megacap growth sectors, including chip giant Nvidia, down by as much as 8.7%. Amazon closed down 3.4%. On the other hand, defensive sectors such as real estate, healthcare, utilities, and consumer staples finished higher.
What’s Next for the Market?
Recent reports of softening consumer demand and sticky inflation have led to concerns over an economic slowdown and potentially higher inflation. With the Federal Reserve’s next interest rate cut decision looming, this week’s employment and business activity data could significantly influence the central bank’s outlook.
Fed Rate Cuts: Impact on Stocks
Traders have been betting on at least two interest rate cuts of 25 basis points each by the Fed by December, according to data compiled by LSEG. However, with the latest inflation concerns, the Fed might reconsider its stance on rate cuts.
Tesla and Intel: What’s Behind the Volatility?
Tesla erased early gains and ended down by 2.84%, despite Morgan Stanley reinstating it as a "top pick" among US autos. Chipmaker Intel closed lower by 4%, erasing gains made in early trade after a report that competitors Nvidia and Broadcom were conducting manufacturing tests with Intel.
Conclusion
The US stocks wall street closes lower as Trump sets 25% tariffs, manufacturing data dips – Market News. Today’s decline marks a significant correction, as investors respond to the evolving economic landscape. As the market navigates this uncertainty, it’s crucial to stay informed and adapt to the changing dynamics of the global economy.
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