Wall Street tumbled on Monday ahead of President Trump’s plans to announce more tariffs on April 2, which he’s dubbed “Liberation Day,” because the new reciprocal tariffs, he says, will restore trade balances between the U.S. and other nations.
But investors are cautious about the impact of a round of new tariffs, which are import fees that are largely passed onto U.S. consumers in the form of higher prices. Consumer confidence this month slumped to a 12-year low as more Americans are expressing concerns about tariffs and a pick-up in inflation.
The Dow Jones Industrial Average slumped 403 points, or about 1%, to 41,181 in early Monday trading, while the broad-based S&P 500 index shed 1.6%. The tech-heavy Nasdaq composite index skidded 2.5%.
The losses come after a sharp sell-off this month that’s placed the S&P 500 on track for its worst quarter in nearly three years, with a loss of more than 5% in the first three months of the year. Investors are anxious over a potentially toxic mix of worsening inflation and a slowing U.S. economy because households are afraid to spend due to the deepening trade war, escalated U.S. by Mr. Trump.
“Consumers are getting fed up, sending confidence to recession levels amid growing fears of higher inflation and deteriorating economic prospects,” wrote Bob Schwartz, senior economist at Oxford Economics, in a March 28 research note.
The details of Mr. Trump’s next round of import taxes are still sketchy, although the president is expected to announce plans for so-called reciprocal tariffs, which are designed to match the import duties placed on U.S. goods and services by other nations.
Most economic analyses say average U.S. families would have to absorb the cost of his tariffs in the form of higher prices and lower incomes, a tough proposition for inflation-weary Americans.
On Friday, the S&P 500 fell 2% for one of its worst days in the last two years. It was the fifth losing week over the last six for the index, helping to drive it down 5% this year.
Tesla stock slump
Tesla’s woes continued as CEO Elon Musk’s electric car company slid 5.6 on Monday. Tesla is down 42% since Trump took office Jan. 20, with losses driven in part by the public perception of Musk’s oversight of the new Department of Government Efficiency that’s slashing government spending.
Tesla sales in Europe and the U.S. have fallen, partly due to Musk’s political shift to the right. Protestors have targeted the automaker’s showrooms, vehicle lots and charging stations, with some resorting to vandalism, including burning privately owned vehicles.
Apple shares were down less than 1% after France’s antitrust watchdog fined the tech giant $162 million over the rollout of a privacy feature resulted in abuse of competition law.
Shares of the mortgage company Rocket fell 3.5% after it announced that it is buying competitor Mr. Cooper in an all-stock deal valued at $9.4 billion. Mr. Cooper shares soared more than 26%. The deals comes just weeks after Rocket acquired real estate listing company Redfin.
The price of gold hit a record high before inching back down to $3,149 an ounce. Investors continue to pull out of equities in search of traditional safe havens like gold.
The Associated Press
contributed to this report.
Aimee Picchi
Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.
