Dow Jones: US Industrial Stocks and Automakers Sink on New Tariff Shock

Dow Futures Sink 500 Points as Trump’s Tariffs Ignite Trade War Fears

Stock futures plunged Monday as President Donald Trump announced tariffs on imports from Canada, Mexico, and China, raising investor concerns about global supply chains, inflation, and economic growth. The Dow Jones Industrial Average futures dropped 584 points, or 1.3%, while S&P 500 and Nasdaq-100 futures lost 1.6% and 1.7%, respectively. Small-cap stocks took the hardest hit, with Russell 2000 futures down 2.1%.

Wall Street’s fear gauge, the Cboe Volatility Index (VIX), briefly spiked above 22 before settling around 19. Risk-off sentiment spread globally, sinking European stocks, cryptocurrencies, and commodities.

Which Markets Were Hit the Hardest?

The tariff shock rippled through multiple asset classes. European equities dropped, with Germany’s DAX falling nearly 2%. Bitcoin plunged from above $102,000 to $91,000, while Ethereum lost 11%. The U.S. dollar surged almost 1%, reflecting a flight to safety.

In commodities, crude oil prices jumped 2% as traders anticipated potential disruptions to energy flows from Canada. Meanwhile, U.S. automakers and suppliers took a significant hit due to concerns about higher costs. General Motors tumbled 7%, Ford lost 4%, and auto-parts makers Aptiv and Cummins shed 5% and 3%, respectively.

How Are Global Leaders Responding?

The White House imposed a 25% tariff on imports from Mexico and Canada, along with a 10% tariff on Chinese goods. Canadian energy exports were hit with a lower 10% levy. Canada quickly retaliated with its own tariffs, while Mexico signaled it would explore countermeasures. China announced plans to challenge the tariffs at the World Trade Organization.

Investors are now bracing for potential tariffs on the European Union, with Trump warning they are “definitely happening.” The uncertainty surrounding trade policy has intensified concerns that protectionist measures could weigh on global growth.

Which Stocks and Sectors Are Feeling the Pressure?

Beyond automakers, several industries felt the tariff impact. Consumer stocks tied to Mexican imports suffered losses, with Constellation Brands down 5% and Chipotle falling 3% due to its reliance on Mexican avocados. Athletic brands like Nike and Lululemon each dropped 2%–3%.

Tech stocks were not spared. Nvidia slid 3.6%, while Apple and Microsoft each lost over 1% in premarket trading. Crypto-related stocks tumbled, with Coinbase, MicroStrategy, and Riot Platforms falling between 6% and 7%.

However, some sectors benefited. U.S. steelmakers rose, with Nvidia up 2% and Steel Dynamics gaining nearly 4%, as investors bet on stronger demand for domestically produced metals.

What’s Next for the Market?

Traders are now watching for further retaliation from global trade partners. The risk of escalating tariffs could further weigh on corporate earnings, with Goldman Sachs estimating that every 5-percentage-point increase in tariffs could cut S&P 500 earnings per share by 1%–2%.

This week, markets will also digest key earnings reports from Alphabet, Amazon, and Palantir, alongside consumer giants Walt Disney and Mondelez. On the economic front, the Nvidia on Friday will provide insight into the labor market’s strength.

If the trade war rhetoric escalates further, volatility may remain elevated, with risk-sensitive assets like tech and crypto stocks facing additional downside pressure. Traders will closely monitor any negotiations or policy shifts that could alter the market outlook.

More Information in our Economic Calendar.