Investing.com-- U.S. stock index futures were marginally higher on Monday evening after sharp losses on Wall Street, as President Donald Trump confirmed 25% tariffs on Canada and Mexico starting Tuesday, along with his decision to double tariffs on Chinese goods.
Market participants also analyzed a manufacturing activity survey, indicating weaker factory activity growth in the world’s largest economy amid tariff worries.
S&P 500 Futures inched 0.2% higher to 5,870.75 points, while Nasdaq 100 Futures gained 0.2% to 20,517.75 points by 19:04 ET (00:04 GMT). Dow Jones Futures ticked up 0.1% to 43,294.0 points.
Trump tariffs to take effect on Tuesday; decision sparks sell-off
On Monday, President Donald Trump announced the implementation of a 25% tariff on imports from Canada and Mexico, effective March 4, and signed an order increasing tariffs on Chinese goods to 20%, up from the previous 10%.
Trump also confirmed that the reciprocal tariffs will come into effect from April 2.
Following the announcement, the Dow Jones Industrial Average plummeted 1.5%, closing at 43,192.04. The broader S&P 500 fell 1.8% to 5,849.88 points, and the NASDAQ Composite dropped 2.6% to 18,350.19.
The technology sector, particularly companies involved in artificial intelligence and semiconductors, experienced notable declines.
NVIDIA’s (NASDAQ: NVDA ) stock fell 8.7%, entering bear market territory, and other companies like Broadcom Inc (NASDAQ: AVGO ) and Super Micro Computer Inc (NASDAQ: SMCI ) also saw significant losses.
The Wall Street Journal reported Sunday that Chinese buyers are navigating around U.S. export bans to order Nvidia’s Blackwell chips.
This sector-wide downturn reflects investor concerns about the tariffs’ impact on global supply chains and future profitability.
Weak manufacturing data shows signs of tariff concerns
The Institute for Supply Management (ISM) released its manufacturing Purchasing Managers’ Index (PMI) on Monday, indicating a marginal expansion in manufacturing activity for February.
The PMI came in at 50.3, down from January’s 50.9, hovering just above the threshold that separates expansion from contraction.
Notably, the new orders index dropped into contraction territory at 48.6, signaling reduced future demand.
This manufacturing slowdown compounds existing concerns about the U.S. economy, following recent data releases showing weak economic growth.
“The US manufacturing ISM report was disappointing with big drops in new orders and employment. Tariff uncertainty may be playing a role and is certainly prompting companies to factor in the risks within their pricing,” ING analysts said in a note.
“As such we expect to see ongoing subdued activity until there is at least some clarity on the domestic situation and the tariffs that US exports may be subject to by foreign nations,” they added.