The S&P 500 was 0.5 per cent lower as trading resumed in the US following a holiday-shortened week. The benchmark index remains near its all-time high set last week.
The Dow Jones Industrial Average was down 217 points, or 0.5 per cent, as of 10:49 am Eastern time, and the Nasdaq composite was 0.6 per cent lower.
Bond yields mostly rose. The yield on the 10-year Treasury rose to 4.38 per cent from 4.34 per cent late Thursday.
Tesla tumbled 6.9 per cent for the biggest drop among S&P 500 stocks as the feud between CEO Elon Musk and President Donald Trump reignited over the weekend. Musk, once a top donor and ally of Trump, said he would form a third political party in protest over the Republican spending bill that passed last week.
Wall Street was watching for developments in the Trump administration’s bid to reshape global trade by threatening sharply higher tariffs on US trading partners.
Trump told reporters over the weekend that his administration would send letters to several foreign governments as early as Monday spelling out their tariff rates if they don’t reach a deal before Wednesday. He added that the US would not start collecting those taxes until August 1, although Treasury Secretary Scott Bessent rejected the idea that August 1 was a new deadline and declined to say what might happen Wednesday.
Late Sunday, Trump said he would impose an additional 10 per cent in tariffs against the BRICS bloc of developing nations, which had condemned tariffs increases at its summit in Brazil. In addition to Brazil, the BRICS countries also include Russia, India, China and South Africa.
The near-term outlook will likely hinge on several key factors like the extent to which trading partners are included in Trump letters, the rate of tariffs, and the effective date of such tariffs, according to analysts at Nomura.
Last week, the Trump administration announced that it reached a deal with Vietnam that would allow US goods to enter the country duty-free, while Vietnamese exports to the US would face a 20 per cent levy. That was a decline from the 46 per cent tax on Vietnamese imports he proposed in April.
“The type of deal struck with Vietnam may be a blueprint for similar countries in the region with economies heavily reliant on large trade deficits with the US,” said Jason Pride, chief of investment strategy and research at Glenmede.
Most of the sectors in the S&P 500 index were in the red, led by technology and consumer-related stocks.
Oracle fell 1.9 per cent and Chipotle Mexican Grill was down 2.9 per cent.
Molina Healthcare fell 0.4 per cent after the insurer lowered its profit guidance due to rapidly accelerating costs. UnitedHealth Group also recently reported a spike in costs that forced it to cut its forecast, sending its stock tumbling in April.
In deal news, software company CoreWeave agreed to acquire cryptocurrency mining company Core Scientific in an all-stock transaction valued at about USD 9 billion. Shares in Core Scientific sank 18.6 per cent, while CoreWeave slid 3.7 per cent.
The downbeat start to the week follows a strong run for stocks, which pushed further into record heights last week after a better-than-expected US jobs report.
Oil prices fluctuated after OPEC+ agreed on Saturday to raise production in August by 5,48,000 barrels per day.
US benchmark crude was up 1.2 per cent, while Brent crude, the international standard, was up 1.5 per cent.
Stock indexes in Europe were mostly higher. Asian markets closed mostly lower.
This week will be relatively light on economic data. On Wednesday the Federal Reserve will release minutes from its policymaking committee’s meeting last month.
The Fed’s chair, Jerome Powell, has been insisting that the central bank wants to wait and see how Trump’s tariffs affect the economy and inflation before making its next move on interest rates.
While lower rates give a boost to the economy by making it easier to borrow money, they can also give inflation more fuel. That could be dangerous if the Trump’ administration’s tariffs send inflation higher. (AP) NPK NPK
