U.S. stocks fell sharply on Monday following President Donald Trump’s announcement of sweeping new tariffs targeting countries, including Japan, South Korea, and South Africa. The Dow Jones Industrial Average closed down 422 points, or 0.94%, while the S&P 500 fell 0.79% and the Nasdaq Composite lost 0.92%—marking the worst trading day in about three weeks for all three indices.
Markets had opened lower amid anticipation of Trump’s tariff letters, but losses accelerated after he confirmed the new duties, with Asian markets opening flat on Tuesday in an early response.
Trump Targets Multiple Nations with Tariffs Up to 40%
The sell-off intensified midday as Trump announced 25% tariffs on Japan and South Korea, set to take effect August 1. Stocks dropped further in the afternoon after the White House revealed additional tariffs of 25% to 40% on countries including Myanmar, Malaysia, Kazakhstan, Laos, and South Africa.
Trump shared the updates on Truth Social, posting letters outlining the new tariff regime. The documents emphasized that the tariff rates “may be modified, upward or downward.”
Exchange-traded funds (ETFs) tracking impacted nations also declined:
- Japan-focused ETF: -2.4%
- South Korea-focused ETF: -3.56%
- Malaysia-focused ETF: -1.97%
- South Africa-focused ETF: -1.73%
These represented the worst performance for these funds since early April.
White House Pushes Tariff Deadline
White House Press Secretary Karoline Leavitt announced Monday that Trump would sign an executive order extending the July 9 deadline to August 1 to give time for further negotiations.
“Trump on Sunday said the White House would send ‘tariff letters’ to countries on Monday at noon,” and he reiterated on Friday that the letters would include tariff rates effective August 1.
Market Analysts Cite Higher-than-Expected Tariff Rates
According to Ross Mayfield, an investment strategist at Baird, the tariff rates came in higher than markets anticipated, prompting broad sell-offs. Bond markets also reacted, with the 10-year Treasury yield rising to 4.39% and the 30-year yield hitting 4.92%, as investors repositioned portfolios.
Currencies React: Dollar Strengthens, Asian Currencies Slide
The US dollar index rose 0.3%, while the Japanese yen, South Korean won, and South African rand all weakened in response to the developments.
Asian Markets Eye Negotiation Window
Despite the steep tariffs, Asia’s markets opened Tuesday on a relatively stable note:
- Japan’s Nikkei 225: +0.5%
- South Korea’s Kospi: +1.5%
- Hong Kong’s Hang Seng: +0.3%
- Australia’s ASX 200: +0.1%
Despite Monday’s losses, the S&P 500 has reached four record highs since June 27, buoyed by strong economic data and investor hopes that Trump’s aggressive tariff strategy could yield favorable trade terms.
