U.S. shares are shedding floor in afternoon trading on Monday (July 7, 2025) as the Trump administration steps up strain on trading partners to make offers earlier than punishing tariffs imposed by the U.S. take impact.
The S&P 500 was down 1.2% within the first day of trading within the U.S. after a holiday-shortened week. The benchmark index stays close to its all-time excessive set final week.
The Dow Jones Industrial Average was down 641 factors, or 1.4%, as of two:32 p.m. (jap time) and the Nasdaq composite was 1.3% decrease.
Decliners outnumbered gainers by greater than 5-to-1 on the New York Stock Exchange.
Tesla tumbled 7.4% for the most important drop amongst S&P 500 shares as the feud between CEO Elon Musk and President Donald Trump reignited over the weekend. Mr. Musk, as soon as a high donor and ally of Mr. Trump, mentioned he would kind a 3rd political occasion in protest over the Republican spending invoice that handed final week.
The promoting accelerated after the Trump administration launched letters informing Japan and South Korea that their items might be taxed at 25% beginning on Aug. 1, citing persistent commerce imbalances with the 2 essential U.S. allies in Asia.
“If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 25% that we charge,” Mr. Trump wrote within the letters to Japanese Prime Minister Shigeru Ishiba and South Korean President Lee Jae-myung.
Mr. Trump informed reporters over the weekend that his administration would ship letters to a number of international governments as early as Monday (July 7, 2025) spelling out their tariff charges in the event that they don’t attain a deal earlier than Wednesday (July 9, 2025) — the end result of a 90-day negotiating interval set by the White House throughout which items from most international locations have been taxed at a baseline 10%.
He additionally mentioned on Sunday (July 6, 2025) that he would impose an extra 10% in tariffs towards the BRICS bloc of creating nations, which had condemned tariffs will increase at its summit in Brazil. In addition to Brazil, the BRICS international locations additionally embody Russia, India, China and South Africa.
With the 90-day pause in U.S. tariffs towards an extended listing of countries set to run out, the specter of extra extreme tariffs hangs over the worldwide economic system as soon as once more.
“Just bringing back that meaty topic back into focus, after a strong week last week, has given a little bit of a pause in the market,” mentioned Bill Northey, senior funding director at U.S. Bank Asset Management.
The near-term outlook will doubtless hinge on a number of key components just like the extent to which trading partners are included in Trump letters, the speed of tariffs, and the efficient date of such tariffs, based on analysts at Nomura.
Last week, the Trump administration introduced that it reached a deal with Vietnam that may permit U.S. items to enter the nation duty-free, whereas Vietnamese exports to the U.S. would face a 20% levy. That was a decline from the 46% tax on Vietnamese imports he proposed in April.
“The type of deal struck with Vietnam may be a blueprint for similar countries in the region with economies heavily reliant on large trade deficits with the U.S.,” mentioned Jason Pride, chief of funding technique and analysis at Glenmede.
All of the sectors within the S&P 500 index have been within the purple, with expertise, monetary and consumer-related shares among the many largest weights available on the market.
Apple fell 2.2%, JPMorgan Chase dropped 2% and Home Depot slid 1.7%.
Molina Healthcare fell 3.5% after the insurer lowered its revenue steerage as a consequence of quickly accelerating prices. UnitedHealth Group additionally lately reported a spike in prices that compelled it to chop its forecast, sending its inventory tumbling in April.
In deal information, software program firm CoreWeave agreed to amass cryptocurrency mining firm Core Scientific in an all-stock transaction valued at about $9 billion. Shares in Core Scientific sank 18.1%, whereas CoreWeave fell 4.8%.
Bond yields largely rose. The yield on the 10-year Treasury rose to 4.39% from 4.34% late Thursday.
The downbeat begin to the week follows a robust run for shares, which pushed additional into document heights final week after a better-than-expected U.S. jobs report.
Stock indexes in Europe have been largely increased. Asian markets closed largely decrease.
Oil costs fluctuated after OPEC+ agreed on Saturday to boost manufacturing in August by 548,000 barrels per day.
U.S. benchmark crude was up 0.6%, whereas Brent crude, the worldwide normal, was up 1.2%.
This week might be comparatively mild on financial information. On Wednesday the Federal Reserve will launch minutes from its policymaking committee’s assembly final month.
The Fed’s chair, Jerome Powell, has been insisting that the central financial institution needs to attend and see how Trump’s tariffs have an effect on the economic system and inflation earlier than making its subsequent transfer on rates of interest. While decrease charges support the economic system by making it simpler to borrow cash, they’ll additionally give inflation extra gas. That may very well be harmful if the Trump’ administration’s tariffs ship inflation increased.
