The Dow plunged 822 points as Trump’s new 15% global tariffs and AI disruption fears hit earnings hopes
Tariffs are back, AI fears are rising, and markets just reminded investors how fragile this rally can be.
US stocks slid Monday as investors reacted to US President Donald Trump’s latest tariff escalation and mounting concerns that artificial intelligence could disrupt profits across key sectors.
CNBC reports the S&P 500 fell about 1 percent to 6,837.75, the Dow Jones Industrial Average dropped roughly 1.7 percent or 821.91 points to 48,804.06, and the Nasdaq Composite lost about 1.1 percent to 22,627.27.
Trump moved quickly after the Supreme Court struck down his sweeping “reciprocal” tariffs.
He first announced a 10 percent global tariff on Friday, then raised it to 15 percent on Saturday.
AP News said the 15 percent levy can run for up to 150 days unless Congress extends it, while the administration pursues other channels for more permanent measures.
CNBC reported that the White House is using Section 122 of the Trade Act of 1974, which lets a president impose duties for 150 days before needing Congressional approval.
The policy shift is already straining trade relationships.
European officials warned about the impact on existing deals, and the European Parliament paused work on ratifying the US–EU trade agreement.
South Korea’s trade minister said uncertainty could deepen if the US keeps turning to alternative tariff laws, as per AP News.
Reuters reported that domestic lumber and packaging companies sold off on fears cheaper imports will erode their pricing power, with Smurfit WestRock and International Paper down about 7 percent and 6 percent.
At the same time, Jefferies analysts highlighted Best Buy, Ralph Lauren and Nike as likely retail beneficiaries from lower effective tariff rates, with Target and Elf Beauty also positioned to gain.
AI disruption worries hit software, cybersecurity, and financials.
CNBC reported that the Dow faced extra pressure from IBM, which fell 13 percent after Anthropic detailed new programming capabilities for its Claude Code product.
Microsoft dropped 3 percent and CrowdStrike nearly 10 percent.
AP News said a new Anthropic tool that scans codebases for vulnerabilities and suggests patches has weighed on cybersecurity stocks, pushing CrowdStrike’s year-to-date loss above 25 percent and dragging AppLovin down 43.5 percent for the year after another 9.1 percent decline.
CNBC noted that a report from Citrini Research warning that the AI boom could drive unemployment to 10 percent has been cited on Wall Street trading floors as a factor behind weakness in software and financial names, including a 7 percent drop in American Express and nearly 6 percent in Mastercard.
AP News added that Blue Owl Capital, which has lent to software companies seen as vulnerable to AI competition, fell 3.4 percent and sits more than 30 percent lower for the year.
Risk-off flows showed up in classic havens.
CNBC reported that spot gold rose more than 2 percent and gold futures climbed more than 3 percent as tariff uncertainty stoked concern about inflation and global growth.
Bloomberg said the 10-year US Treasury yield fell about four basis points to roughly 4.04 percent as investors moved into government bonds.
Gennadiy Goldberg of TD Securities told Bloomberg that earlier worries about lost tariff collections and refunds had pressured rates markets, but the new 15 percent tariffs could ease some of that concern by restoring revenue, even as refund questions remain.
Policy signals stayed mixed.
AP News reported that Federal Reserve Governor Christopher Waller described the odds of a rate cut in March as a “coin flip,” a notable shift from January when he opposed holding rates steady after three cuts late last year.
Bloomberg said Waller views underlying inflation, excluding tariff effects, as close to the 2 percent target, with consumer prices rising at an annualised 2.4 percent in January.
Interest-rate swaps now largely push expectations for the next quarter-point cut into the second half of the year.
Elsewhere, AP News reported that airline stocks dropped after heavy snow and high winds cancelled thousands of flights in the US Northeast, with United Airlines down 5.2 percent, American Airlines 4.9 percent and Delta Air Lines 3.7 percent.
Novo Nordisk’s US-traded shares tumbled 16.4 percent after its CagriSema trial showed less weight loss over 84 weeks than a competing Eli Lilly drug; Eli Lilly’s stock rose 4.9 percent.
Bitcoin slumped as well, briefly falling below US$64,000 before recovering slightly, according to AP News, while CNBC said it traded below US$65,000 and remained more than 4 percent lower as its sell-off continued.
Summing up the backdrop, Chris Larkin of E-Trade from Morgan Stanley said the Supreme Court’s tariff ruling “was simply going to open a new chapter in the trade saga, not end it,” as reported by AP News.
Michael Landsberg of Landsberg Bennett Private Wealth Management told CNBC he expects the “push and pull with tariffs” to stay a distracting force in markets for the rest of the year, though likely with less volatility than the initial shock last April.
