Wall St closes lower as Trump sets 25% tariffs, manufacturing data dips

By Johann M Cherian, Sukriti Gupta and Chibuike Oguh

NEW YORK (Reuters) -Wall Street's main banal indexes closed sharply little connected Monday aft President Donald Trump announced the commencement of 25% tariffs connected Canada and Mexico, with the S&P 500 posting its biggest regular percent diminution since December 18.

Stocks had already slipped aft an ISM survey, and they extended losses aft Trump said 25% tariffs connected Canada and Mexico volition spell into effect connected Tuesday with reciprocal tariffs starting April 2. He said the North American countries had "no country left" to avert the tariffs.

"Markets were looking for different 11th hr woody to further hold tariffs, but aren't going to get 1 this time," said Jamie Cox, managing spouse astatine Harris Financial Group. "The menace of tariffs has tally its people for now, truthful the adjacent signifier is to endure them. Markets person to terms that reality, and those numbers are painted red."

The ISM survey showed manufacturing PMI slipped to 50.3 past period from 50.9 successful January, portion the forward-looking caller orders scale contracted to 48.6 successful February from 55.1 successful January. The dip successful the PMI mirrored declines successful different sentiment measures arsenic investors disquieted astir tariffs.

"I deliberation it's conscionable much of a continuation of a drawstring of atrocious economical quality that tends to enactment a small spot of a dampener connected the optimism that we saw from the 4th fourth net that were getting released, which were beauteous good," said James St. Aubin, main concern serviceman astatine Ocean Park Asset Management successful Santa Monica, California.

Energy and exertion sectors led declines among the S&P 500's 11 sectors, with astir megacap maturation sectors ending down including spot elephantine Nvidia - which is down 8.7%. Amazon closed down 3.4%.Defensive sectors specified arsenic Real estate, healthcare, Utilities and user staples finished higher.

The Dow Jones Industrial Average fell 649.67 points, oregon 1.48%, to 43,191.24, the S&P 500 mislaid 104.78 points, oregon 1.76%, to 5,849.72 and the Nasdaq Composite mislaid 497.09 points, oregon 2.64%, to 18,350.19.

Recent reports of softening user request person spurred fears of an economical slowdown and higher inflation. Trump is besides expected connected Tuesday to rise fentanyl-related tariffs connected Chinese imports to 20% from 10% currently, unless Beijing ends fentanyl trafficking into the U.S. U.S.-listed shares of Chinese companies fell, with Nio tumbling 8.6% and JD.com dropping astir 4%.

Worries astir sticky ostentation person made the Federal Reserve much cautious connected involvement complaint cuts, but this week's employment and concern enactment information could alteration the cardinal bank's view. Traders person been betting connected astatine slightest 2 involvement complaint cuts of 25 ground constituent each from the Fed by December, according to information compiled by LSEG. Tesla erased aboriginal gains and ended down 2.84%. Morgan Stanley had reinstated the banal arsenic "top pick" among U.S. autos. Chipmaker Intel closed little by 4%, erasing gains that came successful aboriginal commercialized aft a study that spot designers Nvidia and Broadcom were moving manufacturing tests with the company.