Stocks fall as Trump tariffs impact markets

U.S. stocks plummet as Trump announces tariffs; European defense stocks surge amid rising military spending and geopolitical tensions.

In Short

U.S. stocks plunged after President Trump announced a 25% tariff on Canadian and Mexican goods, leading to losses across major indexes. In contrast, European stocks surged with defence companies benefitting from increased military spending discussions.

U.S. stocks fell significantly in afternoon trading as President Trump announced a 25% tariff on Canadian and Mexican goods, set to start on Tuesday.

The Nasdaq Composite dropped by 2.5%, leading the declines among major indexes. The Dow Jones Industrial Average fell by 1.6%, over 700 points.

Trump’s confirmation eliminated hopes for any last-minute negotiations.

Recent data indicated a rise in U.S. manufacturers’ supply costs, raising concerns about possible inflation driven by tariff threats.

European stocks

In contrast to the U.S. market slump, European stocks rallied, with the Stoxx Europe 600, FTSE 100, and Germany’s DAX hitting new records.

Defense stocks led the gains in Europe, benefiting from increased discussions on military spending amidst efforts to formulate a Ukraine-Russia peace plan following Trump’s meeting with Ukraine’s president.

Meanwhile, U.S. stock indexes saw significant losses, with the Nasdaq, Dow, and S&P 500 each down by at least 1.6%.

Benchmark 10-year Treasury yields decreased to 4.168%, down from 4.228% after a sharp decline over the last month.