Wall Street’s main indexes pared losses on Monday, as U.S. President Donald Trump delayed new tariffs on Mexico after his orders to levy steep tariffs on three countries sparked a global scramble to safe-haven assets earlier in the day.
Trump said he has paused planned tariffs on Mexico for one month after the nation agreed to reinforce its northern border with 10,000 National Guard members to stem the flow of illegal drugs, particularly fentanyl.
Over the weekend, Trump had announced hefty new tariffs of 25% on imports from Mexico and Canada, and 10% on China – which he said may cause “short-term” pain for Americans.
“Trump has been really serious that tariffs are going to be a primary tool to achieve a number of different things,” said Carol Schleif, chief investment officer at BMO Family Office.
“They’re not going away and the ride is likely to be bumpy in the short run. And it’s clear the European Union is in his sights too.”
Analysts at Citi noted that “if tariffs persist, markets are likely to move further (down) and inflationary effects will emerge.”
At 2:19 p.m. EST (1919 GMT), the Dow Jones Industrial Average rose 5.17 points, or 0.01%, to 44,549.83, the S&P 500 lost 21.37 points, or 0.36%, to 6,019.00 and the Nasdaq Composite lost 129.66 points, or 0.66%, to 19,497.78.
Six of the 11 major S&P sectors rose, with defensive ones such as healthcare and consumer staples leading gains.
Legacy automakers – who have been roiled by the impending tariffs – recouped some of their losses with Ford down 1.5% and General Motors down 3.1%.
The Cboe Volatility Index, known as Wall Street’s fear gauge, touched its highest level in a week before dropping to a latest level of 18 points.
The stock market had already been pulling back last week after Chinese startup DeepSeek unveiled a breakthrough in cheap artificial intelligence models that sunk tech stocks. Nvidia fell 3.7%, while a gauge of semiconductor stocks was down 1.5%.
“With the tariffs and the DeepSeek freak-out that you had last week, you’ve got the shift going from the picks and shovels of the technology buildout towards software. There’s some of that parsing going on with a focus on software,” Schleif said.
The economically sensitive Russell 2000 smallcaps index recovered from its three-week low, to trade down 1.3%.
Treasury yields edged down as investors fled to safer assets such as bonds and gold. Spot gold scaled an all-time high.
Meanwhile, several large companies report quarterly earnings this week, with Tyson Foods gaining 2.3% after the meatpacker raised its annual sales forecast, while IDEXX Laboratories added 12% after the animal diagnostics maker beat fourth-quarter profit and revenue estimates.
On the data front, U.S. manufacturing grew for the first time in more than two years in January, data from the Institute for Supply Management showed.
Declining issues outnumbered advancers by a 2.17-to-1 ratio on the New York Stock Exchange, and by a 2.57-to-1 ratio on the Nasdaq.
The S&P 500 posted 10 new 52-week highs and 20 new lows while the Nasdaq Composite recorded 32 new highs and 202 new lows.
