U.S. Stocks Tumble as Trump Delays Tariffs on Canada, Mexico
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Why are U.S. stocks tumbling?
The U.S. grants tariff exemptions for certain goods from Canada and Mexico. Plus, stocks sink as trade policy changes make investors anxious.
There's also just the uncertainty. It potentially unnerves businesses. They don't know what's in the future, so it's harder for them to plan, harder for them to make investments.
And what can the U.S. do with its nuclear waste? It's Thursday, March 6th. I'm Alex Osola for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. We start our show with the latest developments on President Trump's tariffs. The White House said today that the U.S. will pause tariffs on goods from Mexico and Canada that comply with the North American Free Trade Pact until April 2nd. that have disrupted markets and strained relations with close allies. A White House official said the exemption will cover about half the imports from Mexico and more than a third of imports from Canada. Any tariffs already paid since Tuesday will not be refunded to companies.
What caused the Nasdaq to close in correction territory?
In a later address from the Oval Office, Trump said that his decision to roll back some tariffs on Mexico and Canada was unrelated to the volatility they caused in US markets. The day-to-day changes in the White House's tariffs policy did spook the markets. The tech-heavy Nasdaq closed in correction territory, falling by about 2.6 percent. The S&P 500 tumbled roughly 1.8 percent, and the Dow dropped about 1 percent. The reaction in the markets is a sign that 2025 isn't going as some investors had hoped. At the start of the year, they were optimistic. The economy was strong and a market-friendly administration seemed poised to roll back regulations.
How are tariffs affecting investor anxiety?
Instead, today's market performance is a continuation of the recent dip, which shows that investors are more anxious. WSJ Markets reporter Sam Goldfarb is here to tell us more. Sam, what is underpinning investors' anxiety?
It's largely one word, which is tariffs and uncertainty about tariffs, which is changing day by day, hour by hour. It does seem that U.S. tariffs on a broad array of goods coming from a broad array of countries are going to be going up. And so that's one thing that investors are a little queasy about because the fear is that Those tariffs, the cost of those will be passed on to consumers. Then consumers might pull back spending a little bit. Either that or the businesses will have to accept smaller profit margins if they don't pass on those costs. So either way, it's not great for stocks. And then there's also just the uncertainty. It potentially unnerves businesses. They don't know what's in the future. So it's harder for them to plan, harder for them to make investments.
What are investors doing in response to market volatility?
So investors have all this anxiety. What are they doing as a result?
In short, selling riskier assets like stocks and buying safer assets like gold and U.S. government bonds. That's kind of like the standard playbook for when they're concerned about at least a slowdown in economic growth, even if we don't have a recession. So yields on U.S. government bonds have fallen since January and the price of gold has gone up.
You know, you write that so far the worst economic reports have been confined to soft data like confidence surveys. How significant is that? What does that mean for the prospect of a recession or a slowdown in growth?
So, you know, I guess it's step one. And because they could signal that the hard data, like the jobs report that we're going to get on Friday or the incoming months could turn worse. Sometimes the soft data doesn't translate to the hard data. People might be saying that they're not feeling great, but they actually just keep on spending. That's happened a little bit in recent years. So we'll just have to see.
That was markets reporter Sam Goldfarb. Thank you, Sam.
Thank you.
How is the U.S. trade deficit changing?
The U.S. trade deficit surged in January as imports grew much more than exports. According to Commerce Department data out today, imports rose 10 percent to about $401 billion, while exports climbed by 1.2 percent to roughly $270 billion. That resulted in a deficit of about $131 billion, which was 34 percent greater than the deficit in December.
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Chapters
6 chapters
1
Why are U.S. stocks tumbling?
0:03–1:11
2
What caused the Nasdaq to close in correction territory?
1:11–1:53
3
How are tariffs affecting investor anxiety?
1:53–2:53
4
What are investors doing in response to market volatility?
2:53–3:57
5
How is the U.S. trade deficit changing?
3:57–4:28
6
Why did U.S. imports surge in January?
4:28–12:10
Speakers
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