(WASHINGTON) — Stocks closed down significantly on Monday after President Donald Trump announced steep tariffs on seven countries and threatened to impose new levies on others.
The Dow Jones Industrial Average closed down 422 points, or 0.9%, while the S&P 500 dropped 0.7%. The tech-heavy Nasdaq declined 0.9%.
Tesla, the electric-vehicle company led by tech billionaire Elon Musk, fell 6% after the CEO reignited a feud with Trump by announcing plans to launch a political party.
The selloff interrupted a weekslong market surge propelled in part by strong economic data and expectations of interest rate cuts at the Federal Reserve.
On Monday morning, Trump unveiled 25% tariffs on South Korea and Japan that would take effect at the beginning of August. Within hours, Trump announced fresh tariffs on five additional countries, including South Africa and Malaysia.
Trump plans to sign an executive order on Monday setting Aug. 1 as the new start date for so-called “reciprocal tariffs,” White House Press Secretary Karoline Leavitt told reporters. Those levies had targeted dozens of countries with a range of tariffs as high as 50%.
Trump delayed the country-specific tariffs in April, vowing to strike roughly 90 trade deals in 90 days. That pause had been set to expire on Wednesday.
So far, the White House says it has reached trade agreements with only the United Kingdom and Vietnam, as well as a preliminary accord with China.
On Monday, Trump also threatened to place an additional 10% tariff on countries that align with BRICS nations, suggesting he had not backed off his commitment to use levies as a diplomatic policy tool.
BRICS nations, which recently voiced “serious concerns” about unilateral tariffs, are made up of founding members Brazil, Russia, India and China, among a few others.
Key measures of the economy have proven resilient in recent months, defying fears of resurgent inflation and a possible economic downturn. The stock market has also surged, hitting fresh record highs and eliciting cautious optimism from some Wall Street analysts.
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