Investing.com --The S&P 500 slumped Monday, as fears over a global trade war resumed after President Donald Trump confirmed that tariffs on Mexico and Canada will begin on Tuesday, and also signed an order to hike tariffs on China.
At 4:00 p.m. ET (21:00 GMT), the Dow Jones Industrial Average fell 648 points, or 1.5%, the S&P 500 index fell 2%, and the Nasdaq Composite fell 2.6%.
Trump confirms tariffs on Mexico, Canada to go ahead; Trump signs order to implement additional 10% tariffs on China
President Donald Trump confirmed Monday that tariffs on Mexico, and Canada are set to go ahead on Tuesday as both nations have now run out of room to negotiate a deal.
Trump also signed an order to implement an additional 10% surcharge on imports from China, set to come into effect on Tuesday, taking the total levy imposed on imported China goods from the Trump administration to 20%.
Soft ISM PMI further fuels growth worries
The Institute for Supply Management’s manufacturing purchasing managers’ index increased by 50.3 last month, down from 50.9 in January, which was the first expansion since October 2022. Economists had predicted a reading of 50.6.
A number above 50 indicates expansion in the manufacturing sector, which makes up just over 10% of the U.S. economy.
"U.S. manufacturing activity expanded marginally for the second month in a row in February after 26 consecutive months of contraction," said Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee.
"Demand eased, production stabilized, and destaffing continued as panelists’ companies experience the first operational shock of the new administration’s tariff policy."
The data comes just as the Atlanta Fed’s GDPNow estimate now predicts the U.S. economy will contract 2.8% in the first quarter. This is almost double last week’s prediction of a 1.5% drop.
Nvidia slides as China reportedly skirting US export ban; Intel shines, Capri jumps on potential Versace sale
NVIDIA Corporation (NASDAQ:NVDA) fell more than 8%, dragging the broader chip sector lower after The Wall Street Journal reported Sunday that Chinese buyers are navigating around U.S. export bans to order the company’s Blackwell chips.
Intel Corporation (NASDAQ:INTC) ended up 4% lower after gaving up earlier gains, which had followed a Reuters report that Nvidia and Broadcom (NASDAQ:AVGO) are running manufacturing tests with Intel.
In deal-making news, meanwhile, Capri Holdings Ltd (NYSE:CPRI) is inching closer to selling Varsace to Prada (OTC:PRDSY) for nearly €1.5 billion euros ($1.6 billion), Bloomberg reported, citing unnamed sources.
Bitcoin gives up Trump-fueled gains
Bitcoin gave up intraday gains to trade more than 8% lower despite optimism over a U.S. crypto strategic reserve.
Trump on Sunday repeated his plans for a Crypto Strategic Reserve, stating that he had directed an executive group to proceed with the project. He claimed that Bitcoin, Ether, XRP, Solana, and Cardano will comprise the reserve.
(Peter Nurse, Scott Kanowsky and Ayushman Ojha contributed to this article.)