NEW YORK: Wall Street’s main indexes pared losses on Monday, as US President Donald Trump paused new tariffs on Mexico for one month after his orders to levy steep tariffs on key trading partners sparked a global scramble to safe-haven assets earlier in the session.
Over the weekend, Trump imposed hefty new tariffs of 25% on imports from Mexico and Canada, and 10% on China - which he said may cause “short-term” pain for Americans.
Trump’s announcement on Mexico came after the country agreed on Monday to reinforce its northern border with 10,000 National Guard members to stem the flow of illegal drugs, particularly fentanyl.
Talking about the negotiations with Mexico, Steve Sosnick, chief market analyst at Interactive Brokers, said this “raises the possibility that there’s some negotiating room with either Canada, China or both.”
“Its much more encouraging to the markets there’s this pause and that is that is exactly why the market shot higher.”
At 11:18 a.m. ET, the Dow Jones Industrial Average fell 59.33 points, or 0.13%, to 44,485.33, the S&P 500 lost 36.31 points, or 0.60%, to 6,004.22 and the Nasdaq Composite lost 191.91 points, or 0.98%, to 19,435.53.
Most S&P sectors turned higher, with defensive ones such as health care and consumer staples leading gains.
Other megacap and growth stocks were also off session lows, with Nvidia now down 2.3%, while a gauge of semiconductor stocks was now only down 1%.
Legacy automakers - who had been roiled by the impending tariffs - also recouped most of their losses with both Ford and General Motors down over 1% each.
The economically sensitive Russell 2000 smallcaps index recovered from its three-week low, now down 0.9% on the day.
Treasury yields edged down as investors fled to safer assets such as bonds and gold. Spot gold scaled an all-time high.
The Cboe Volatility Index, known as Wall Street’s “fear gauge”, dropped back from its highest level in a week, last at 17.72 points.
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