Stocks on Wall Street fell sharply on Monday, led by losses across major indices, including the Dow Jones Industrial Average, S&P 500, and Nasdaq. The S&P 500 shed 0.8%, its worst single-day drop since mid-June, while the Dow and Nasdaq both declined 0.9%. Despite the setback, all three indices remained close to their recent record highs.
Decliners outnumbered gainers by nearly 4-to-1 on the New York Stock Exchange, indicating broad-based weakness across the market.
Tesla tumbles amid political fallout
Tesla led the list of laggards with a 6.8% drop—the sharpest among S&P 500 stocks—as tensions reignited between CEO Elon Musk and former ally Donald Trump. Musk, once a major donor to Trump, declared his intention to start a third political party, in protest against the Republican spending bill passed last week.
Tariff threats escalate global tensions
Investor concerns deepened following the Trump administration’s move to send formal letters to Japan and South Korea, notifying them of impending 25% tariffs on their goods from August 1. Trump warned that any retaliatory increases in tariffs would be added on top of the new levy.
Tariff hikes were also announced on goods from Malaysia, Kazakhstan, South Africa, Laos, and Myanmar. Trump further threatened an additional 10% tariff on BRICS nations—Brazil, Russia, India, China, and South Africa—following criticism at the bloc’s summit in Brazil.
Market outlook hinges on trade diplomacy
According to Nomura analysts, the market’s near-term trajectory depends on how widely tariffs are imposed, their rates, and when they take effect. Earlier this year, Trump had delayed global tariffs by 90 days to allow time for trade negotiations—a window that expires before Wednesday.
A trade agreement with Vietnam was finalised last week, enabling duty-free entry for U.S. goods while imposing a 20% tariff on Vietnamese exports to America. Analysts say this deal might serve as a template for other nations.
Sector-wise impact and earnings outlook
Technology, financial and consumer sectors weighed heavily on the S&P 500. Apple dropped 1.7%, JPMorgan Chase 1.4%, and Home Depot 1.1%. Molina Healthcare fell 2.9% after cutting its profit forecast due to rising costs. UnitedHealth had made similar revisions earlier this year.
CoreWeave’s crypto acquisition sinks stocks
Software firm CoreWeave agreed to buy Core Scientific, a crypto mining company, in an all-stock deal worth approximately $9 billion. The announcement dragged Core Scientific’s shares down 17.6%, while CoreWeave fell 3.3%.
Bonds, oil and global markets
Bond yields mostly rose, with the 10-year Treasury climbing to 4.39% from 4.34%. Oil prices fluctuated after OPEC+ decided to raise production by 548,000 barrels per day in August. U.S. crude rose 1.4% to $67.93 per barrel, while Brent climbed 1.9% to $69.58.
Stock indices in Europe closed mostly higher, whereas Asian markets ended mostly lower.
Fed’s next move hinges on tariffs’ impact
The Federal Reserve is expected to wait before adjusting interest rates, with Chair Jerome Powell monitoring how the new tariffs influence inflation and growth. The central bank will release the minutes of its last policy meeting on Wednesday.
All told, the S&P 500 dropped 49.37 points to 6,229.98, the Dow Jones lost 422.17 points to 44,406.36, and the Nasdaq composite fell 188.59 points to 20,412.52.
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