Wall Street Drops as Trump Announces New Tariffs

Stocks fell on Wall Street Monday as the Trump administration stepped up pressure on trading partners to make deals before punishing tariffs imposed by the US take effect.

• The S&P 500 fell 49.37 points, or 0.8%, to 6,229.98.
• The Dow Jones Industrial Average fell 422.17 points, or 0.9%, to 44,406.36.
• The Nasdaq composite fell 188.59 points, or 0.9%, to 20,412.52.

Tesla tumbled 6.8% after the feud between CEO Elon Musk and President Trump reignited over the weekend. Musk, once a top donor and ally of Trump, said he would form a third political party in protest over the Republican spending bill that passed last week.

The selling accelerated after the Trump administration released letters informing Japan and South Korea that their goods will be taxed at 25% starting on Aug. 1, citing persistent trade imbalances with the two crucial US allies in Asia, the AP reports. "If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 25% that we charge," Trump wrote in the letters to Japanese Prime Minister Shigeru Ishiba and South Korean President Lee Jae-myung. He later announced tariffs on imports from five more countries.

• Trump told reporters over the weekend that his administration would send letters to several foreign governments as early as Monday spelling out their tariff rates if they don't reach a deal before Wednesday — the culmination of a 90-day negotiating period set by the White House during which goods from most countries have been taxed at a baseline 10%.
• He also said on Sunday that he would impose an additional 10% in tariffs against the BRICS bloc of developing nations, which had condemned tariff increases at its summit in Brazil. In addition to Brazil, the BRICS countries also include Russia, India, China, and South Africa.

All of the sectors in the S&P 500 index were in the red, with technology, financial, and consumer-related stocks among the biggest weights on the market. Apple fell 1.7%, JPMorgan Chase dropped 1.4% and Home Depot slid 1.1%. Molina Healthcare fell 3% after the insurer lowered its profit guidance due to rapidly accelerating costs. UnitedHealth Group also recently reported a spike in costs that forced it to cut its forecast, sending its stock tumbling in April. In deal news, software company CoreWeave agreed to acquire cryptocurrency mining company Core Scientific in an all-stock transaction valued at about $9 billion. Shares in Core Scientific sank 17.6%, while CoreWeave fell 3.3%.