MARKET SNAPSHOT

U.S. stocks fell sharply after President Trump confirmed that he would impose a 25% levy on Canadian and Mexican goods. Treasury yields fell as looming tariffs have investors increasing bets on interest-rate cuts this year. Oil futures declined after OPEC+ said it would boost output starting in April. Gold prices rebounded from some of their recent weakness as the dollar weakened.

MARKET WRAPS

EQUITIES

U.S. stocks tumbled after President Trump confirmed that he would impose a 25% levy on Canadian and Mexican goods.

The technology-heavy Nasdaq Composite slid 2.6%, leading declines among the three major indexes. The Dow industrials fell 1.5%. The S&P 500 lost nearly 1.8%.

The tariffs on Canada and Mexico are slated to start Tuesday. Hours ahead of the deadline, Trump dashed investors' hopes for a last-minute reprieve, telling reporters that there was "no room left" for negotiations.

New data released Monday morning showed U.S. manufacturers' supply costs jumped in February, as Trump's tariff threats raised the specter of higher inflation.

Earlier Monday, Chinese shares ended mixed, as investors stayed cautious ahead of the country's National People's Congress meeting this week. The date when Trump's additional tariffs on China take effect coincides with the opening of China's NPC, adding to anticipation over Beijing's policy responses to support growth, OCBC analyst Tommy Xie said.

The benchmark Shanghai Composite Index edged 0.1% lower, the Shenzhen Composite Index rose 0.3% and the ChiNext Price Index gained 1.2%. Hong Kong's Hang Seng Index closed 0.3% higher.

Japan's Nikkei Stock Average rose 1.7% following Friday's selloffs and as concerns about borrowing costs ebbed.

Stocks in Australia rose, with the S&P/ASX 200 adding 0.9%.

New Zealand's NZX-50 shed 0.4%, snapping a run of three daily gains amid weakness among infrastructure and real-estate stocks.

COMMODITIES

Oil futures ended lower after the major producers known as OPEC+ said they will boost output starting in April, and as President Trump's planned tariffs on imports from Canada and Mexico threatened to slow demand for energy.

Traders also weighed prospects for a Ukraine peace deal after Friday's public clash between Trump and Ukrainian President Volodymyr Zelensky in the Oval Office. Prices for oil, meanwhile, failed to find support from an improvement in Chinese economic data.

West Texas Intermediate crude for April delivery fell 2% to settle at $68.37 a barrel on the New York Mercantile Exchange. May Brent crude lost 1.6%, ending at $71.62 a barrel on ICE Futures Europe.

The Organization of the Petroleum Exporting Countries and its allies "want to appease Trump but if you look under the hood, we feel they want to recapture market share they have lost," said Tariq Zahir, managing member at Tyche Capital Advisors.

Gold futures rebounded from the end of month selling seen last week, ending up 1.9% to $2,890.20 an ounce.

TODAY'S TOP HEADLINES

Trump Says Canada-Mexico Tariffs Will Take Effect, 'No Room Left' For Talks

President Trump said the U.S. would go ahead with 25% tariffs on goods from Canada and Mexico effective Tuesday, declaring there was "no room left" for negotiations with America's neighbors.

"Tomorrow, tariffs-25% on Canada, and 25% on Mexico-and that will start tomorrow," Trump said Monday at the White House. "So they're going to have a tariff, and what they have to do is build their car plants, frankly, and other things, in the United States, in which case you have no tariffs."

U.S. stocks fell in afternoon trading after Trump said the tariffs would move forward.

U.S. Factory Activity Eased as Tariffs Threats Spark Accelerating Costs

U.S. manufacturing activity expanded slightly in February for a second straight month after 26 months of contraction, although at a more cautious pace as price growth accelerated on the threat of new tariffs.

The Institute for Supply Management said Monday that its purchasing managers' index of manufacturing activity ticked down to 50.3 in February from 50.9 in January. That was slightly weaker than the 50.6 from a consensus of economists polled by The Wall Street Journal.

It was, however, above the 50-mark that divides growth and contraction, the second time after more than two years below.

European Defense Sector Enters Upswing as Europe Prepares to Rearm

Europe's defense industry is on course for an extended upswing, as investors rally to take positions ahead of share price and guidance increases, analysts said.

European leaders have signaled more readiness on providing Ukraine with security guarantees should a ceasefire deal be reached, and expanding their defense capabilities amid fears the U.S. could decrease its military presence in the continent.

European governments such as Denmark and the U.K. have announced boosts to defense spending. Other members of the North Atlantic Treaty Organization are expected to follow, according to NATO Secretary-General Jens Stoltenberg. Meanwhile, the European Council meets Thursday to discuss lifting defense spending, possibly by easing fiscal rules.

Trump, Chip Maker TSMC Announce $100 Billion Investment in U.S.

WASHINGTON-Taiwan Semiconductor Manufacturing Co. plans to invest at least $100 billion more in chip-manufacturing plants in the U.S. over the next several years under a plan announced Monday by the company and President Trump.

TSMC plans to use the funds to add to its chip manufacturing in Arizona. It will construct three new chip plants, two chip-packaging plants and a research and development center, Chief Executive C.C. Wei said during a White House appearance with the president.

Such an expansion would advance a long-pursued U.S. goal to revive the domestic semiconductor industry after manufacturing fled largely to Asian countries in recent decades.

Kroger CEO Rodney McMullen Resigns After Investigation Into Personal Conduct

Kroger Chief Executive Rodney McMullen resigned from the company following a board investigation into his personal conduct, ending a more than four-decade career at the grocery chain.

Kroger, the biggest U.S. supermarket chain by sales, said Monday that while the conduct was unrelated to the company's business, it was inconsistent with its ethics policy. Lead director Ronald Sargent will serve as chairman and interim CEO while the company searches for a permanent replacement for McMullen.

"I plan to be a steady, but active hand in the execution of our strategy, " said Sargent, who has been on Kroger's board since 2006 and lead director since 2017. He previously held corporate roles at Kroger and served as CEO of office-supplies retailer Staples.

Expected Major Events for Tuesday

00:30/AUS: Jan Retail Trade

00:30/SKA: Feb South Korea Manufacturing PMI

00:30/AUS: 4Q International Investment Position

00:30/AUS: 4Q Balance of Payments

05:00/JPN: Feb Consumer Confidence Survey

08:30/HK: 4Q Quarterly Statistics on Vessels, Port Cargo & Containers

22:00/AUS: Feb Australia Services PMI

22:00/AUS: Feb Australian PMI

22:00/AUS: Feb Australian PCI

23:00/SKA: 4Q Revised GDP / Preliminary Gross National Income

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

March 03, 2025 16:47 ET (21:47 GMT)

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