US stocks close lower as Trump sets 25% tariffs, manufacturing data dips
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Traders work on the floor of the New York Stock Exchange in New York City.
PHOTO: REUTERS
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NEW YORK - Wall Street’s main stock indexes slipped on March 3 after President Donald Trump announced the start of 25 per cent tariffs on Canada and Mexico, and after data showed a slight dip in US manufacturing.
Stocks slipped after an ISM survey and extended losses after Mr Trump said 25 per cent tariffs on Canada and Mexico
The ISM survey showed manufacturing PMI slipped to 50.3 in February from 50.9 in January, while the forward-looking new orders index contracted to 48.6 in February from 55.1 in January. The dip in the PMI mirrored declines in other sentiment measures as investors worried about tariffs.
“I think it’s just more of a continuation of a string of bad economic news that tends to put a little bit of a dampener on the optimism that we saw from the fourth quarter earnings that were getting released, which were pretty good,” said Mr James St. Aubin, chief investment officer at Ocean Park Asset Management in Santa Monica, California.
“You’ve got a lot of policy uncertainty from Trump. Certainly layoffs are part of that but also the trade policy. I think that’s all working against the positive sentiment forcing that sort of glass-half-full mentality into a back seat position and bringing out some of the bearish glass-half-empty mindset that comes and goes.”
According to preliminary data, the S&P 500 lost 104.19 points, or 1.75 per cent, to end at 5,850.31 points, while the Nasdaq Composite lost 497.09 points, or 2.64 per cent, to 18,350.19. The Dow Jones Industrial Average fell 643.61 points, or 1.47 per cent, to 43,197.30.
Recent reports of softening consumer demand have spurred fears of an economic slowdown and higher inflation. Mr Trump has threatened that an extra 10 per cent duty on imports from China will also take effect on March 4, which could spark retaliation from Beijing.
US-listed shares of Chinese companies fell, with Nio and JD.com off about 6 per cent and 1 per cent, respectively.
Worries about sticky inflation have made the Federal Reserve more cautious on interest rate cuts, but this week’s employment and business activity data could change the central bank’s view.
Traders have been betting on at least two interest rate cuts of 25 basis point each from the Fed by December, according to data compiled by LSEG.
Tesla erased early gains. Morgan Stanley had reinstated the stock as “top pick” among US autos.
Chipmaker Intel closed lower, erasing gains that came in early trade after a report that chip designers Nvidia and Broadcom were running manufacturing tests with the company. REUTERS
