The Nasdaq dove 497.09 points or 2.6% to 18,350.19, the S&P 500 tumbled 104.78 points or 1.8% to 5,849.72 and the Dow slumped 649.67 points or 1.5% to 43,191.24. The substantial weakness that emerged on Wall Street came amid concerns about the economic impact of President Donald Trump's proposed tariffs.
The Commerce Secretary Howard Lutnick described the proposed 25% tariffs on imports from Mexico and Canada as fluid but said the additional 10% tariff on imports from China is set. Trump later clarified that the 25% tariffs on imports from Mexico and Canada will take effect tomorrow and reciprocal tariffs on other U.S. trade partners will be imposed on April 2nd.
The Institute for Supply Management's February report showed US manufacturing activity slightly decreased, with its PMI dropping to 50.3 from 50.9 in January, still indicating growth. Prices surged to 62.4, the largest increase since January 2024. Meanwhile, the Commerce Department's report revealed a modest decline in US construction spending for January.
Computer hardware stocks extended the sharp pullback seen over the past couple weeks, dragging the NYSE Arca Computer Hardware Index down by 4.2% to its lowest closing level in a month. A steep drop by the crude oil also weighed on oil producer stocks, as reflected by the 4.1% nosedive by the NYSE Arca Oil Index. Semiconductor stocks also moved sharply lower, resulting in a 4.0% slump by the Philadelphia Semiconductor Index. Networking, airline and retail stocks too were considerably weak, moving lower along with most of the other major sectors.
Asia-Pacific stocks moved mostly higher. Japan's Nikkei 225 Index shot up by 1.7%, while Hong Kong's Hang Seng Index rose by 0.3%. The major European markets also showed strong moves to the upside on the day. While the German DAX Index surged by 2.6%, the French CAC 40 Index jumped by 1.1% and the U.K.'s FTSE 100 Index climbed by 0.7%.
In the bond market, treasuries moved higher, extending a recent upward trend. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell 5.1 basis points to a nearly three-month closing low of 4.18%.