U.S. stocks fell significantly on Monday after former President Donald Trump unveiled a series of new tariffs targeting multiple countries, including Japan, South Korea, and South Africa. The Dow dropped 422 points (0.94%), while the S&P 500 and Nasdaq Composite declined 0.79% and 0.92%, respectively — marking their worst performance in three weeks.
Midday, Trump announced 25% tariffs on Japan and South Korea, with additional tariffs ranging from 25% to 40% on countries such as Malaysia, Laos, Kazakhstan, and South Africa. These announcements spurred a broad market sell-off.
Global Stocks Tumble As Tariff Uncertainty Sparks Investor Anxiety And Market Volatility Spike
Investors reacted swiftly, with shares of major Japanese and South Korean companies listed in the U.S. suffering sharp losses. Toyota, Nissan, and Honda saw declines of up to 7.16%, while South Korean tech firms LG Display and SK Telecom dropped more than 8%.
ETFs tracking affected countries also tumbled, with Japan and South Korea-focused funds posting their worst days since April. Meanwhile, U.S. Treasury yields climbed, and the dollar strengthened as investors reassessed risk. The CBOE Volatility Index spiked 8.4%, indicating rising market fear.
Markets Slide as Trump Tariff Surge Hits Global Stocks, Fuels Investor Jitters and Recession FearsTrump posted the tariff letters on Truth Social, stating that rates could change and that the moves were meant to push countries toward new trade deals. The original July 9 deadline for trade negotiations was extended to August 1 through an executive order, setting a new timeline for potential deals.
The White House signaled more announcements were imminent, increasing uncertainty. Analysts noted that the higher-than-expected tariff rates fueled market anxiety, contributing to the sell-off across equities and bonds.
Analysts Divided As Trade Tensions Rise, Market Volatility And Recession Fears Loom Large
Despite Monday’s decline, some analysts see the dip as a buying opportunity amid strong economic data and recent record highs for the S&P 500 and Nasdaq. Others are more cautious, warning of overconfidence in the markets. Analysts like Scott Wren from Wells Fargo flagged concerns that the economy could slow as tariffs take effect, potentially impacting consumer spending. Several strategists emphasized that the situation remains fluid, with further tariff escalations or trade agreements likely to drive volatility.
Adding to the uncertainty, Trump announced an additional 10% tariff on countries aligning with BRICS — an economic bloc that includes Brazil, Russia, India, China, and South Africa. This development signals a broader scope of trade tensions ahead. While the S&P 500 has notched recent highs, the Dow remains over 600 points below its record. Analysts warn that if trade tensions escalate and recession fears resurface, safe-haven assets like gold could rally while stocks face renewed pressure.
