Dow falls by 650 points: Trump announces Zölle on Mexico and Canada

Dow falls by 650 points: Trump announces Zölle on Mexico and Canada

The US exchanges had to accept a decline on Monday, as the investors prepared themselves for President Donald Trump's planned tariffs on Canada and Mexico, which should come into force until the midnight.

strong decline in indices

The Dow Jones Industrial Average fell by 650 points or 1.48% and closed at 43,191 points. During the after -trade, the Dow temporarily fell by almost 900 points before it easily recovered. The wider S&P 500 also lost 1.76% and the Nasdaq Composite even 2.64% in value.

a historical decline

for the S&P 500 this was the biggest decline in day of the year. Since Trump took office on January 20, the Nasdaq has fallen by about 6.5%.

Trump announces Zölle

"Tomorrow the tariffs come into force - 25% on Canada and 25% on Mexico," Trump explained during a press conference in the White House. "You have to build your automotive works in the United States, then the tariffs fall away."

Trump said that there was no longer any room for negotiations for the two trading partners to avoid the tariffs and that he wanted to introduce tariffs to "punish" countries that, in his opinion, benefit from the US economy without returning enough.

increase in tariffs to China

In addition, Trump signed an executive regulation on Monday that raises the tariffs from 10% to 20% on imports from China. The aim of these tariffs is to get China to reduce the import of fentanyl to the United States, which has not yet been done sufficiently.

market reactions and risks

The Vix, the Angestindex of Wall Street, jumped to the highest level of the year according to Trump's statements. "Due to the uncertainty in connection with the tariffs, the stock market has eaten the profits of the 'Trump Bump' after the presidential elections, and the expected price increase causes investors," said Gustavo Flores-Macias, Professor of Government and Public Policy Analysis at Cornell University.

"For investors, in 2025, there could be a positive year for stocks, but it could take the whole year to make moderate profits," added Gina Bolvin, President of the Bolvin Wealth Management Group.

economic effects of tariffs

The tariffs that Trump has imposed are significant and the largest in the history of US China relationships. The initial tariffs, which came into force on February 4, were worth $ 1.4 trillion, which is more than triple the $ 380 billion in foreign goods that were occupied with tariffs during Trump's first term.

A spokesman for the Chinese Ministry of Commerce expressed dissatisfaction and the firm resistance against the additional tariffs on Tuesday. "(China) will take countermeasures to keep his own rights and interests," added the spokesman in an explanation.

investor content and market volatility

US shares could remain "volatile" until Trump's policies take a more growth-oriented direction, said Jason Draho, head of wealth allocation for America at UBS Global Wealth Management. He expects future growth and has a "positive medium -term assessment".

The stock market started to fall on Monday morning, while investors processed the latest survey data from the Institute for Supply Management to the manufacturing industry. The survey showed that the economic activity in industry remained in an expansion area but decreased last month. The concerns about tariffs dominated the feedback on the survey.

effects on Bitcoin and other markets

The markets came under pressure on Monday afternoon after Trump had posted Truth Social that he plans to introduce tariffs to "external products", possibly also on agricultural products. Trump's contribution referred to his plans for reciprocal Zölle, which are due to come into force on April 2. However, the exact implementation procedure is still unclear.

"To the great farmers of the United States: Prepare you to manufacture many agricultural products that are to be sold in the USA. Customs are raised on April 2 on April 2nd. Much fun!"

market development and setbacks

The sentiment in the markets fell into the area of "extreme fear" on Monday, after Trump had confirmed that the tariffs would come into force on Tuesday, according to CNNS Fear and Greed Index.

The shares that pulled the markets down on Monday belonged to Nvidia ( nvda ), which fell by 8.7%. The return of the 10-year government bonds fell to 4.16%, which indicates concerns about uncertainty and future economic growth.

Bitcoin was traded at about $ 85,600 on Monday afternoon, which corresponds to a decline of 8.6% within one day and largely destroyed the profits, which according to Trump's announcement of a strategic crypto reserve that would include Bitcoin.

In the meantime, the shares of defense companies in Europe on Monday to Record heights Consider the need for recovery in the face of low US support for Ukraine.

The WTI oil price, the benchmark for US oil, has fallen by about 2% to the lowest level since Opec+ had announced that oil production was increased in April.

In this report, CNNS Elisabeth Buchwald, Matt Egan, David Goldman, Bryan Mena, Hassan Tayir and Vanessa Yurkevich were involved.