US stock indexes extend losses after January ISM manufacturing PMI data.

A survey of U.S. manufacturers turned positive for the first time in more than two years on the eve of President Trump’s declaration of new tariffs on Mexico, Canada and China. Now the big question is whether the fresh momentum will fade if a trade war breaks out.

The closely followed ISM manufacturing rose to 50.9% in January from 49.2% at the end of 2023. It also topped the critical 50% threshold for the first time in 27 months.

Any number above 50% signals expansion.

The index had surged on optimism about Trump’s vow to cut taxes and reduce regulations. But that was before details of his trade penalties become public over the weekend.

The tariffs on major U.S. trading partners could upset plans for a rebound. Manufacturers may have to contend with higher prices for raw materials they procure from other countries and their own exports may suffer if other countries retaliate.