US stock markets experienced notable declines on Monday, driven by President Trump’s threats to impose new tariffs on trading partners. This includes plans for a 25% tariff on imports from Japan and South Korea, effective August 1. The Dow Jones Industrial Average experienced a drop of over 400 points, roughly translating to a 1.4% decrease. Similarly, the S&P 500 saw a decline of 1.2%, and the Nasdaq Composite also fell by 1.2%, with Tesla stock dropping due to concerns over CEO Elon Musk’s new political party ambitions.
This downturn follows a previous period of record closing highs for stocks, with investors particularly focused on the impending tariff deadlines. On Monday, Trump utilized social media to communicate with the leaders of South Korea and Japan about these tariffs, also warning nations aligning with what he called ‘Anti-American policies’ of BRICS about additional tariffs across the board, which he indicated could reach up to 10% without exceptions.
These developments have intensified existing trade tensions as countries scramble to finalize tariff deals ahead of Trump’s self-imposed July 9 deadline. To date, the US has only secured agreements with the UK and Vietnam, along with a framework for discussions with China. Treasury Secretary Scott Bessent stated that official notifications of the tariffs will be sent out this week, but actual implementation will not happen until the start of August.
In addition to the tariff news, the upcoming earnings reports are anticipated to shift focus back to corporate performance, starting with Delta Airlines’ report on Thursday, marking the beginning of the second quarter earnings season.
Overall, while the stock market faces pressure due to trade uncertainty, there remains optimism surrounding corporate earnings and potential clarity in tariff negotiations as discussions continue with major trading partners.