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Stocks Drop as Trump Confirms Tariffs on Mexico, Canada, and China

Stocks Drop as Trump Confirms Tariffs on Mexico, Canada, and China. Source: Photo by Rômulo Queiroz

The S&P 500 fell sharply Monday as renewed trade war fears rattled markets after President Donald Trump confirmed tariffs on Mexico and Canada will take effect Tuesday. He also signed an order to impose an additional 10% tariff on Chinese imports, bringing the total levy to 20%.

At market close, the Dow Jones Industrial Average dropped 648 points (1.5%), the S&P 500 declined 2%, and the Nasdaq Composite plunged 2.6%. The latest tariffs come as negotiations with Mexico and Canada failed to yield a deal, increasing concerns over economic growth.

Manufacturing data further fueled worries, with the ISM Manufacturing PMI rising to 50.3 in February, below expectations of 50.6. While this marked a second consecutive month of expansion after 26 months of contraction, demand weakened, and companies continued cutting staff. The Atlanta Fed’s GDPNow model now projects a 2.8% contraction in the U.S. economy for Q1, worsening from last week’s 1.5% decline estimate.

Tech stocks took a hit, with NVIDIA (NASDAQ: NVDA) tumbling over 8% after reports that Chinese buyers are bypassing U.S. export bans to access its Blackwell chips. Intel (NASDAQ: INTC) lost 4% despite earlier gains following reports that it is running manufacturing tests with Nvidia and Broadcom (NASDAQ: AVGO).

Bitcoin dropped over 8%, reversing earlier gains despite optimism over Trump’s proposed U.S. Crypto Strategic Reserve, which he said would include Bitcoin, Ether, XRP, Solana, and Cardano.

In M&A news, Capri Holdings (NYSE: CPRI) is reportedly nearing a deal to sell Versace to Prada for approximately $1.6 billion.

Markets remain volatile as investors assess the impact of tariffs and economic uncertainty.

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