- Stocks were at record high going into Independence Day weekend.
- Fear tariff pause would end drove stocks lower at opening Monday.
- U.S. jobs report suggests solid economic footing.
U.S. stocks hit a record high Thursday as the market closed for the holiday weekend. But the adage what goes up must come down proved true Monday morning as stocks dropped amid talk of ending the tariff pause.
CNBC reported that “the Dow Jones Industrial Average slipped 447 points, or 1%. The S&P 500 fell 0.8%, and the Nasdaq Composite lost 0.9%.”
The tumble came after President Donald Trump announced a 25% tariff on Japanese and Korean imports, per CNBC. “In a pair of Truth Social posts, Trump said he sent letters to Korea and Japan notifying the countries of the levies. These tariffs will start Aug. 1, and will be added to any retaliatory tariffs from either nation,” per the article.
According to Yahoo Finance, Tesla stock fell “amid worries about CEO Elon Musk’s plan to launch a political party.”
CNBC reported that the EV maker shed 7% after Musk said he’d launch the “America Party.”
A strong jobs report had bolstered stocks going into the weekend. The U.S. labor market added 147,000 jobs in June and unemployment fell to 4.1%, amid expectations that unemployment could be expected to move higher.
“You’re just not seeing any feed through from tariff or trade related stress,” RSM chief economist Joe Brusuelas told Yahoo Finance. “We got an absolutely solid payroll number.”
He described his expectation the U.S. would have a “slowing, but solid” economy.
The market is reacting to news that the tariff pause could end Wednesday for many countries, unless President Donald Trump opts for the Aug. 1 deadline he hinted might be possible. According to CNBC, when asked Sunday when the tariffs were going to take effect, Commerce Secretary Howard Lutnick told CNBC’s “Squawk Box” they’d take effect Aug. 1. “But the president is setting the rates and the deals right now.” The article said that Trump was part of the interview and nodded in agreement.
As The Wall Street Journal reported, “Trump said late Sunday that ‘tariff letters and/or deals’ will be delivered from midday Monday. He also threatened an additional levy on countries aligning themselves with the BRICS group of emerging economies,” including Brazil, Russia, China and India.
Trump said those countries aligning with BRICS would face an additional 10% tariff, with “no exceptions” made.
The BRICS group was meeting in Rio de Janeiro, Brazil, as he made that announcement.
The Journal said that the dollar gained, the stock indexes slipped and the 10-year Treasury yield rose. It also noted that the European Union is working to have an agreement in principle with the U.S. by Wednesday to avoid Trump’s threatened imposition of a 50% tariff on EU imports.
CNBC said that the newly announced tariffs cause a 4% drop in shares of Toyota Motor and Honda Motor stock. The article noted that AMD and Nvidia were slightly lower, while Apple and Alphabet were down 1%.
By midmorning, Bitcoin was trading around $109,000, per the article.
