After moving sharply lower early in the session, stocks have regained ground over the course of the trading day on Monday. The major averages have climbed well off their worst levels of the day but currently remain firmly in negative territory.
The Nasdaq is down 208.71 points or 1.1 percent at 19,418.73 and the S&P 500 is down 39.45 points or 0.7 percent at 6,001.08. The narrower Dow is posting a more modest loss, down 122.33 points or 0.3 percent at 44,422.33.
The recovery attempt by stocks comes after President Donald Trump confirmed he has reached an agreement with Mexican President Claudia Sheinbaum to pause recently implemented tariffs on Mexico for one month.
The tariff pause comes after Sheinbaum said Mexico will immediately reinforce its northern border with 10,000 members of its National Guard to prevent drug trafficking from Mexico to the United States, particularly fentanyl.
Stocks moved sharply lower in early trading amid concerns about a global trade war after Trump officially imposed a 25 percent tariff on imports from Canada and Mexico and a 10 percent tariff on imports from China.
A statement from the White House said Trump is taking “bold action to hold Mexico, Canada, and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country.”
Trump also threatened possible tariffs against the United Kingdom and the European Union, marking a significant escalation.
Canada and Mexico ordered retaliatory tariffs on American goods, while China vowed countermeasures. The EU also warned of firm retaliation if targeted.
Investors fear that a trade war could hit the earnings of major companies and dent global growth. The tariffs could also lead to renewed inflation fears, leading the Federal Reserve to keep interest rates on hold for longer.
Sector News
Computer hardware stocks have climbed well off their worst levels but continue to see significant weakness, with the NYSE Arca Computer Hardware Index down by 1.9 percent.
Considerable weakness also remains visible among housing stocks, as reflected by the 1.7 percent loss being posted by the Philadelphia Housing Sector Index.
Airline, banking and semiconductor stocks are also seeing notable weakness, while gold stocks have moved higher along with the price of the precious metal.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan’s Nikkei 225 Index plunged by 2.7 percent, while Australia’s S&P/ASX 200 Index tumbled by 1.8 percent.
The major European markets have also shown notable moves to the downside. While the German DAX Index is down by 1.5 percent, the French CAC 40 Index is down by 1.2 percent and the U.K.’s FTSE 100 Index is down by 1.1 percent.
In the bond market, treasuries are regaining ground following the pullback seen last Friday. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.4 basis points at 4.525 percent.
U.S. Stocks Rebound From Early Lows After Trump Pauses Tariffs On Mexico
2025-02-03 16:04:00
