On Monday, the stock market went down, but it bounced back a little after President Donald Trump pushed back tariffs on Mexico. Originally, Trump planned to add extra taxes on goods from Mexico, Canada, and China to help reduce illegal drugs coming into the U.S. He announced that the new taxes would be paused for a month because Mexico agreed to send more troops to its northern border.
Trump had initially introduced big tariffs of 25% on imports from Mexico and Canada and 10% on China, saying these might cause some short-term problems for Americans. Carol Schleif, a chief investment officer, said tariffs are going to be used a lot and that we should expect some ups and downs ahead. Analysts at Citi warned that if the tariffs last, the market might drop even more.
The Dow Jones Industrial Average fell by 122.75 points to 44,421.91. The S&P 500 dropped 45.96 points to 5,994.57, and the Nasdaq Composite lost 235.49 points, ending at 19,391.96. Five of the eleven S&P sectors did go up, especially defense sectors like healthcare and consumer goods, while technology and retail got hit hard.
Big car manufacturers like Ford and General Motors were affected by the tariffs but did manage to recover a bit. The fear level on Wall Street, measured by the Cboe Volatility Index, reached a week-high but then fell back down to 18.6. Last week, a Chinese company called DeepSeek caused tech stocks to drop because of news about cheap artificial intelligence.
The Russell 2000 index, which measures small companies, was down by 1.3% but did recover from a low it had for three weeks. As more people invested in safer options like bonds and gold, Treasury yields went down, with gold hitting a new high.
This week, several big companies are set to announce their quarterly earnings. Tyson Foods saw its shares rise by 2.2% after it raised its sales forecast, and IDEXX Laboratories jumped by 11.1% because it did better than expected in profit and revenue. U.S. manufacturing also showed growth for the first time in over two years, according to data from the Institute for Supply Management.
On the New York Stock Exchange, more stocks went down than up, with declining stocks outnumbering advancers by a ratio of 2.18-to-1. On the Nasdaq, 1,306 stocks rose while 3,089 fell, creating a 2.37-to-1 ratio of declining stocks to advancers. There were 16.34 billion shares traded, more than the average of 15.57 billion shares over the last 20 days.
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