By Anietie anii-bassey
U.S. stocks retreated sharply Monday after President Donald Trump intensified his latest round of tariffs, reigniting trade uncertainty while investors continued to dump shares of companies seen as vulnerable in the accelerating artificial intelligence race.
The broad-based selloff sent the S&P 500 down 1%, as markets absorbed Trump’s weekend announcement that he would impose temporary 15% tariffs on imports from a range of countries. The move marked an escalation from the 10% rate he had unveiled just days earlier, after the Supreme Court of the United States ruled that he lacked authority to enforce sweeping “reciprocal” tariffs introduced earlier this year.
The Dow Jones Industrial Average tumbled 821 points, or 1.7%, while the tech-heavy Nasdaq Composite dropped 1.1%, reflecting renewed anxiety over both trade policy and technology-sector disruption.
Although Monday’s declines were not as severe as the market turmoil that followed Trump’s initial “Liberation Day” tariff announcement in April, the rapid shift toward more aggressive trade measures underscored how unsettled the global economic outlook remains.
The Supreme Court’s decision had briefly lifted investor sentiment last week, but the president’s swift pivot signaled that legal obstacles would not necessarily halt his broader trade agenda.
Under the new plan, the 15% tariffs could remain in place for up to 150 days unless Congress extends them. At the same time, the administration is pursuing alternative legal avenues to implement more permanent trade restrictions on specific industries and countries. Trading partners responded cautiously.
South Korea’s trade minister, Kim Jung-kwan, warned that continued reliance on alternative statutes to impose tariffs could heighten uncertainty and strain diplomatic ties.
Currency markets reflected the unease. The U.S. dollar edged lower against major counterparts. Bitcoin briefly slipped below $64,000 before stabilizing above earlier monthly lows. Gold prices continued to rise, benefiting from demand for perceived safe-haven assets during periods of geopolitical and economic stress.
Market analysts said investors appear resigned to a prolonged period of legal wrangling and policy shifts before clarity emerges on the future of global trade. Chris Larkin, managing director for trading and investing at E-Trade from Morgan Stanley, noted that Friday’s rally following the Supreme Court ruling quickly gave way to fresh concerns as it became clear the decision would open a new chapter in the trade saga rather than end it.
Beyond tariffs, another force weighed heavily on Wall Street: intensifying fears that artificial intelligence could upend established business models. Companies viewed as potentially disadvantaged by rapid AI innovation saw steep declines.
Shares of CrowdStrike fell 9.8%, deepening losses for the year to more than 25%. Investors reacted to the growing impact of new AI-driven cybersecurity tools, including a system developed by Anthropic that scans codebases for vulnerabilities and recommends software patches. The technology has rattled parts of the cybersecurity sector, raising concerns about competitive pressure and shrinking margins.
Software and advertising technology firm AppLovin slid 9.1%, bringing its year-to-date decline to over 40%. Lenders exposed to software companies also faced selling pressure, with Blue Owl Capital dropping 3.4% as investors questioned the durability of revenue streams in industries undergoing AI-driven transformation.
Market volatility may intensify later this week as investors await earnings from Nvidia, whose chips power much of the AI boom. Analysts have raised concerns that major technology companies such as Alphabet and Amazon are investing heavily in Nvidia’s hardware, potentially stretching balance sheets in pursuit of productivity gains that may take years to materialize.
Travel stocks also suffered after severe winter weather disrupted thousands of flights across the Northeast. United Airlines fell 5.2%, American Airlines lost 4.9%, and Delta Air Lines declined 3.7% as operational challenges compounded broader market weakness.
In the healthcare sector, Denmark-based drugmaker Novo Nordisk plunged 16.4% in U.S. trading after reporting that its CagriSema weight-loss treatment produced less dramatic results after 84 weeks than a comparable therapy from rival Eli Lilly, whose shares rose nearly 5%.
By the closing bell, the S&P 500 had shed 71.76 points to finish at 6,837.75. The Dow Jones Industrial Average closed at 48,804.06, down 821.91 points, while the Nasdaq Composite dropped 258.80 points to 22,627.27.
Overseas markets were mixed. European indexes declined after Friday’s rally. In Asia, Hong Kong’s Hang Seng index rose 2.5% as investors there reacted positively to the U.S. court ruling before Trump’s latest tariff escalation. South Korea’s Kospi gained 0.6%. Markets in Japan and mainland China were closed for holidays.
In the bond market, the yield on the 10-year U.S. Treasury note fell to 4.03% from 4.08% late Friday, signaling continued demand for safer assets.
Adding to the policy uncertainty, Federal Reserve Governor Christopher Waller said it is a “coin flip” whether the central bank will cut its benchmark interest rate at its March meeting or keep it unchanged. His remarks marked a shift from January, when he dissented from the Fed’s decision to pause rate cuts after three reductions late last year.
Lower interest rates could provide an economic boost and have been strongly advocated by Trump. However, policymakers remain wary that premature easing could reignite inflationary pressures, particularly in an environment complicated by renewed trade tensions and evolving global supply chains.
As markets digest the dual impact of trade policy swings and technological disruption, investors face a landscape marked by volatility, political maneuvering and structural change — forces likely to shape Wall Street’s trajectory in the months ahead.
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