Highlights
Stocks slipped Monday after President Trump announced larger than expected 25 percent tariffs on Japan and South Korea, and similar tariffs on several others, and as the market braced for more trade war news. The Dow Jones industrial average lost 0.9 percent, the S&P 500 slipped 0.8 percent and the Nasdaq was also down 0.9 percent. US Treasury yields, oil prices and the dollar all rose.
Reaction to the trade news appeared only somewhat negative and the mood was cautious. Losses also reflected profit-taking pressure after their moves to record highs last week. Major stock indexes managed to recover a bit from the day's worst levels. Observers expect the Trump administration to announce a flurry of tentative trade deals and the tariff situation is seen playing out over many months rather than coming to a conclusive resolution soon. There was no announcement on tariffs the US will impose on the European Union and markets are hopeful of at least an outline of a trade deal by Trump's deadline Tuesday.
Lack of other macro news left trading rather limited with very little on the US economic calendar this week. US Treasury note auctions will be in focus starting with 3-year notes on Tuesday followed by. 10-year notes on Wednesday and long bonds on Thursday. Yields rose Monday ahead of the auctions, which should help attract better buying this week.
Among sectors, megacaps had a bad day Monday. Tesla was the worst hit at the market penalized the stock after news that Elon Musk would found a new political party and his feud with Trump deepened. Alphabet, Amazon, Apple, Meta and Nvidia all sold off to weigh on the averages.
Reaction to the trade news appeared only somewhat negative and the mood was cautious. Losses also reflected profit-taking pressure after their moves to record highs last week. Major stock indexes managed to recover a bit from the day's worst levels. Observers expect the Trump administration to announce a flurry of tentative trade deals and the tariff situation is seen playing out over many months rather than coming to a conclusive resolution soon. There was no announcement on tariffs the US will impose on the European Union and markets are hopeful of at least an outline of a trade deal by Trump's deadline Tuesday.
Lack of other macro news left trading rather limited with very little on the US economic calendar this week. US Treasury note auctions will be in focus starting with 3-year notes on Tuesday followed by. 10-year notes on Wednesday and long bonds on Thursday. Yields rose Monday ahead of the auctions, which should help attract better buying this week.
Among sectors, megacaps had a bad day Monday. Tesla was the worst hit at the market penalized the stock after news that Elon Musk would found a new political party and his feud with Trump deepened. Alphabet, Amazon, Apple, Meta and Nvidia all sold off to weigh on the averages.
Definition
Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.
Description
Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.
