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U.S. stocks rapidly made back ground after the U.S. and Mexico said tariffs against the trading partner would be paused for one month.
The Dow Jones Industrials backpedaled 165.34 points to 44,379.32.
The S&P 500 slumped 51.26 points to 5,989.27
The NASDAQ fell 247.45 points, or 1.2%, to 19.379.99
Stocks initially dropped Monday after President Donald Trump hit several key U.S. trading partners with tariffs over the weekend, raising fears that a full-blown trade war would disrupt global supply chains, reignite inflation and slow the economy. But gains were rapidly dissolving amid comments from Mexico President Claudia Sheinbaum.
But a post from Sheinbuam following a conversation with Trump sparked an intraday comeback. “We had a good conversation with President Trump with great respect for our relationship and sovereignty; we reached a series of agreements,” Sheinbaum wrote in a post, according to a translation from Spanish.
Trump on Saturday slapped a 25% tariff on goods from Mexico and Canada; energy imports from Canada will have a 10% tariff. Trump also placed a 10% levy on imports from China. Trump also signaled over the weekend that tariffs on the European Union would be imposed next.
U.S. automakers with big North American supply chains led the decline, with General Motors shares off by 5% and Ford down by 4%. Auto suppliers including Aptiv and Avery Dennison lost 8% and 2%, respectively. Engine maker Cummins lost 2%.
Constellation Brands, a large importer of alcohol from Mexico, tumbled 4%. Shares of Chipotle, which imports avocados from Mexico, lost 2%. Nike was down 4%, while fellow clothing maker Lululemon shed 3%.
Prices for the 10-year Treasury gained ground, lowering yields to 4.51% from Friday’s 4.52%. Treasury prices and yields move in opposite
directions.
Oil prices faded seven cents to $72.46 U.S. a barrel.
Prices for gold recaptured $21.00 an ounce to $2,856.00 U.S.
