On Monday, US stocks experienced a decline as investors prepared for President Donald Trump's proposed tariffs on Canada, Mexico, and China to take effect by the midnight deadline. The Dow dropped 526 points, equivalent to a 1.16% decrease, during afternoon trading. The S&P 500 also fell by 1.31%, while the Nasdaq Composite saw a decline of 1.83%. The Russell 2000 index, which monitors smaller companies, experienced a 1.89% decrease.
According to Jason Draho, the head of asset allocation for the Americas at UBS Global Wealth Management, US stocks are expected to exhibit volatility until there is a shift towards more growth-focused policies by President Trump. Despite the current situation, Draho maintains a positive medium-term outlook and anticipates future growth.
The stock market began its descent on Monday morning as investors analyzed the latest manufacturing survey from the Institute for Supply Management. The survey indicated that economic activity in the manufacturing sector remained in expansion mode but had slowed down in the previous month. Concerns regarding tariffs were prevalent in the survey's write-in responses.
Market conditions worsened in the afternoon following President Trump's announcement on Truth Social about his intentions to impose tariffs on external products, potentially including agricultural goods. The specifics of how these tariffs would be implemented were not immediately clear, leading to further uncertainty in the market.
