Renewed Tariff Uncertainty Contributes To Sell-Off On Wall Street

After turning in a strong performance last week, stocks moved sharply lower during trading on Monday. The major averages all showed significant moves to the downside, with the Dow tumbling to its lowest closing level in a month.

The major averages ended the day off their lows of the session but still firmly negative. The Dow slumped 821.91 points or 1.7 percent to 48,804.06, the Nasdaq slid 258.80 points or 1.1 percent to 22,627.27 and the S&P 500 declined 71.76 points or 1.0 percent to 6,837.75.

The sell-off on Wall Street came amid renewed trade uncertainty following the Supreme Court’s decision last Friday striking down most of President Donald Trump’s sweeping global tariffs.

Trump announced in a post on Truth Social on Saturday that he would be raising worldwide tariffs to the “fully allowed” and “legally tested” 15 percent level from the 10 percent he announced shortly after the ruling.

“During the next short number of months, the Trump Administration will determine and issue the new and legally permissible Tariffs, which will continue our extraordinarily successful process of Making America Great Again – GREATER THAN EVER BEFORE!!!” Trump said.

While a fact sheet from the White House acknowledged the president is only allowed to impose the tariffs for a period of 150 days without congressional approval, Trump claimed in a subsequent post that he does not need to go back to Congress for approval.

Trump also said any country that wants to “play games” will be met with a “much higher Tariff, and worse, than that which they just recently agreed to.”

Meanwhile, the European Commission issued a statement requesting “full clarity” on the steps the U.S. intends to take following the Supreme Court decision.

The European Commission called the current situation “not conducive” to delivering “fair, balanced, and mutually beneficial” transatlantic trade and investment, as agreed to by both sides and spelled out in the EU-U.S. Joint Statement of August 2025.

“A deal is a deal,” the European Commission said. “As the United States’ largest trading partner, the EU expects the U.S. to honour its commitments set out in the Joint Statement – just as the EU stands by its commitments.”

Negative sentiment was also generated in reaction to a nosedive by shares of IBM Corp. (IBM), with the tech giant plummeting by 13.2 percent.

IBM came under pressure after Anthropic’s Claude announced COBOL capabilities. COBOL is a programming language used widely in business data processing, which is a core business area for IBM.

Sector News

Financial stocks turned in some of the market’s worst performances on the day, with the KBW Bank Index and the NYSE Arca Securities Broker/Dealer Index plunging by 4.4 percent and 3.4 percent, respectively.

Substantial weakness was also visible among software stocks, as reflected by the 3.9 percent nosedive by the Dow Jones U.S. Software Index.

Airline, computer hardware and networking stocks also saw significant weakness, while gold stocks bucked the downtrend amid a sharp increase by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday, with markets in Japan and China closed for holidays. Hong Kong’s Hang Seng Index surged by 2.5 percent, while Australia’s S&P/ASX 200 Index slid by 0.6 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the German DX Index slumped by 1.1 percent, the French CAC 40 Index dipped by 0.2 percent and the U.K.’s FTSE 100 Index closed just below the unchanged line.

In the bond market, treasuries moved sharply higher due to their appeal as a safe haven amid the tariff uncertainty. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slumped 5.7 basis points to 4.029 percent.

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