Stocks tumbled, and the dollar surged Monday after President Donald Trump announced steep new tariffs on imports from Japan, South Korea, and other key trade partners, ratcheting up tension in an already volatile global trade landscape.
Starting August 1, Trump plans to impose 25% tariffs, scrapping the temporary 10% cap he set back in April to allow time for trade talks. So far, only Britain and Vietnam have struck deals to dodge the hikes. For everyone else, the cost of doing business with the U.S. is about to jump.
Markets hate uncertainty, and investors are bracing for more of it. “Trade, inflation, and earnings are the next big catalysts that will either lift this market or drag it lower,” said Adam Sarhan of 50 Park Investments. “Today’s tariff news just adds to the uncertainty, so we’re seeing a selloff.”
The Dow shed 422 points, closing at 44,406. The S&P 500 dropped nearly 50 points, while the tech-heavy Nasdaq slid by 188 points. Automakers took a big hit: Toyota fell 4% and Honda 3.9% in U.S. trading.
Meanwhile, Tesla shares slid nearly 7% after CEO Elon Musk announced a surprise new political venture — his own “American Party.”
Despite the market jitters, the dollar gained ground, especially against the yen, and Treasury yields ticked higher as traders eyed the Federal Reserve’s next moves. The greenback also strengthened against the euro, which remains on track for its second consecutive year of double-digit gains.
Oil prices also edged higher, shrugging off tariff concerns due to strong demand and OPEC+ supply adjustments. Brent crude settled near $70 a barrel.
Investors now wait for second-quarter earnings reports and the Fed’s meeting minutes for clues on where markets go next.
