US Markets: Dow, S&P 500, Nasdaq Sink As Trump Announces 25% Tariffs On Japan, South Korea
US stocks declined on Monday as President Donald Trump renewed tariff threats against key trading partners, announcing plans to impose 25% duties on imports from Japan and South Korea starting August 1.
The Dow Jones Industrial Average dropped over 400 points, or around 1%, while the S&P 500 fell 0.9%. The tech-heavy Nasdaq Composite also declined 0.9%, with Tesla shares under pressure amid concerns over CEO Elon Musk's intention to launch a political party.
Markets pulled back from record closing highs as investors reacted to the escalating trade tensions. On Monday, Trump shared letters on social media addressed to the leaders of South Korea and Japan, confirming that the 25% tariffs would be implemented at the beginning of next month.
US President Donald Trump warned late Sunday that any country aligning with the 'anti-American policies of BRICS" will face an additional 10% tariff. 'There will be no exceptions to this policy," he stated in a social media post. The remark came after BRICS — a bloc that includes key US trading partners like China and India — criticized Trump's tariff stance during its recent summit.
The latest escalation adds fuel to already-heightened trade tensions, as global economies scramble to secure deals ahead of Trump's July 9 deadline. That's when his 90-day pause on elevated tariffs, first announced in April, is set to expire. So far, the US has only finalized deals with the UK and Vietnam and is working toward a framework agreement with China.
Bessent suggested several deals could still be reached in the coming days, with priority given to securing clarity from 18 major trading partners before finalizing tariffs for over 100 additional countries on the administration's list.
Meanwhile, Tesla (TSLA) shares slumped 7% on Monday following renewed tensions between Elon Musk and President Trump, along with investor concerns over the elimination of electric vehicle tax credits under Trump's proposed budget.
According to data from Ortex, short sellers are estimated to have profited by about $1.4 billion due to the drop in Tesla's share price.
Fueling the decline, Musk announced over the weekend via X (formerly Twitter) that he plans to launch a new political platform called the 'America Party." Trump responded swiftly on social media, claiming Musk had gone 'completely off the rails."
Amid all the geopolitical and political volatility, markets are also turning their attention to earnings. Delta Air Lines (DAL) will unofficially kick off the second-quarter results season with its report due on Thursday.
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