New York
\n CNN
\n \u00a0\u2014\u00a0<\/p>\n
\n US stocks fell Monday as President Donald Trump announced a flurry of tariffs on countries including Japan, South Korea and South Africa.\n <\/p>\n
\n The Dow was down 650 points, or 1.46%, as of the afternoon. The S&P 500 fell 1.2% and the tech-heavy Nasdaq Composite fell 1.25%.\n <\/p>\n
\n Stocks dropped lower after Trump\u2019s initial announcement of 25% tariffs on Japan and South Korea, set to go into effect August 1. Stocks continued to tumble in the afternoon as Trump announced tariffs of varying rates on countries including Myanmar, Malaysia, Kazakhstan, Laos and South Africa.\n <\/p>\n
\n US government bonds also slid as investors sold American assets. The 10-year Treasury yield rose to 4.39% and the 30-year yield rose to 4.93%. Yields and prices trade in opposite directions.\n <\/p>\n
\n Trump posted letters on Truth Social outlining the tariffs, which are separate from sectoral tariffs. The tariff rates \u201cmay be modified, upward or downward,\u201d according to the letters.\n <\/p>\n
\n Stocks had dipped as Wall Street mulled the Trump administration\u2019s plan to announce new trade deals \u2014 or notify countries of new tariff rates. Trump on Sunday said the White House would send \u201ctariff letters\u201d to countries on Monday at noon.\n <\/p>\n
\n Trump had told reporters<\/a> on Friday the letters would detail new tariff rates as of August 1.\n <\/p>\n \n US-listed shares in major Japanese automakers Toyota, Nissan and Honda dropped by 4.1%, 7.5% and 3.8%, respectively.\n <\/p>\n \n US-listed shares in major South Korean technology companies LG Display and SK Telecom dropped as much as 6.6% and 7.7%, respectively.\n <\/p>\n \n Exchange-traded funds managed by BlackRock that track Japanese and South Korean stocks fell 3.6% and 2.2%, respectively, and were on track for their worst day since early April.\n <\/p>\n \n US stocks have rallied in recent weeks<\/a> as investors have bet the worst of the tariff confusion is in the past. As Trump\u2019s self-imposed July 9 deadline for trade deals \u2014 the conclusion of a 90-day pause that began April 9 \u2014 approaches, Wall Street is cautiously optimistic.\n <\/p>\n \n Mohit Kumar, chief strategist and economist for Europe at Jefferies, said in a note he does not think the original July 9 deadline will have a \u201cmaterial impact\u201d on markets.\n <\/p>\n \n \u201cIt will create near-term uncertainty and prompt some profit taking given current valuations and positioning. But the letters are meant as an incentive for other countries to agree to come to a deal quickly and we see more trade deals being signed in the coming weeks,\u201d Kumar said.\n <\/p>\n \n A dip in stocks should be seen as a buying opportunity, Kumar said.\n <\/p>\n \n The S&P 500 has notched four record highs since June 27. Stocks have pushed higher as economic data has been stronger than expected, helping assuage concerns about the impact of the early stages of Trump\u2019s tariff campaign.\n <\/p>\n \n \u201cThe renewed optimism appears to have been buoyed by a series of data points that have seemingly quelled some of the worst investor fears,\u201d Brian Belski, chief investment strategist at BMO Capital Markets, said in a July 3 note. \u201cFor instance, cooler-than-anticipated CPI numbers<\/a> continue to suggest a muted tariff impact, for now at least.\u201d\n <\/p>\n \n Belski said he thinks trade deals will be announced in the coming weeks, providing \u201cmore clarity for both investors and businesses and likely keep[ing] the uptrend in stocks intact.\u201d\n <\/p>\n \n Treasury Secretary Scott Bessent told CNBC on Monday he expects \u201cseveral announcements in the next 48 hours.\u201d Bessent had told CNN\u2019s Dana Bash<\/a> on Sunday that tariff rates would \u201cboomerang\u201d higher on August 1 if trade deals were not completed.\n <\/p>\n \n \u201cIf we\u2019ve learned anything over the last three months, it\u2019s that the situation is very fluid and can change with very little notice,\u201d Jim Baird, chief investment officer at Plante Moran Financial Advisors, said.\n <\/p>\n \n While many investors expect stocks to grind higher, others warn that there is complacency in markets.\n <\/p>\n \n Scott Wren, global market strategist at Wells Fargo Investment Institute, said in a note he thinks the Wall Street consensus is \u201coverly optimistic on the tariff outlook.\u201d\n <\/p>\n \n Wren said there is concern that as tariff rates settle, the economy will begin to slow and consumer spending might pull back.\n <\/p>\n \n \u201cOur feeling is that stocks are ahead of themselves, and as a result, we are looking to trim positions in markets and sectors we find to be overvalued,\u201d he said, mentioning US small cap stocks and consumer discretionary sectors in the S&P 500 that have performed well in recent months.\n <\/p>\n