Key Events in the U.S. Stock Market on Monday, February 3, 2025

The U.S. stock market faced significant volatility on Monday, driven by geopolitical and economic developments, particularly new tariff announcements by President Donald Trump. Here's a summary of the day's key events:

1. Market Performance:

• The S&P 500 fell 0.8%, closing at 5,994.57.
• The Dow Jones Industrial Average dropped 0.3%, ending at 44,421.91.
• The Nasdaq Composite declined by 1.2%, finishing at 19,391.96.
• The Russell 2000 index, representing smaller companies, lost 1.3%, closing at 2,258.42.

2. Impact of Tariffs:

• Over the weekend, President Trump announced tariffs of 25% on goods from Mexico and Canada and 10% on imports from China. This sent global markets into a downturn, with fears of a trade war escalating.
• Early trading saw steep declines—at one point, the Dow was down over 600 points and the S&P 500 nearly 2%. However, losses were pared back after Trump delayed the implementation of tariffs on Mexico by one month.

3. Sector and Stock-Specific Movements:

• Automakers like General Motors (-6%) and Ford (-4%) were hit hard due to concerns over supply chain disruptions from tariffs.
• Tech stocks also suffered, with Nvidia (-5%), Tesla (-5%), and other major players like Microsoft and Alphabet seeing decline.
• Bitcoin-related stocks fell sharply as cryptocurrency prices dropped nearly 3%, reflecting reduced risk appetite among investors.

4. Economic Data:

• The ISM manufacturing index showed growth for the first time in over two years, rising to 50.9% in January. This positive data helped mitigate some of the day's losses.

5. Global Context:

• Asian and European markets also experienced declines due to the tariff announcements.
• Canada and Mexico hinted at retaliatory measures, while China pledged to file a complaint with the World Trade Organization.

Despite early turmoil, late-day recoveries in some sectors reflected cautious optimism as investors awaited further clarity on trade negotiations and economic data later in the week.