The New York Stock Exchange closed sharply lower after Donald Trump announced that a 25% tariff on goods imported from Canada and Mexico would begin on Tuesday. At the close, the Dow Jones index fell by 1.48% to 43,192.04 points, the S&P 500 index decreased by 1.76% to 5,849.88 points, and the Nasdaq index dropped by 2.64% to 18,350.19 points. The negative trend in stock markets was observed in the first trading day of the week as developments regarding the US administration’s tariff policies and macroeconomic data were in focus for investors. As the one-month period given by the US to halt tariffs on Mexico and Canada came to an end, Trump announced that a 25% tariff would be imposed on goods imported from these countries on Tuesday. Trump initially imposed a 25% tariff on goods imported from Canada and Mexico in early February but later suspended the tariffs for a month after announcing measures to enhance border security for these countries. Trump noted that an additional 10% tariff would be applied to goods imported from China, increasing the total tariff to 20% starting on April 2 in a reciprocal manner. Trump shared in a post on his Truth Social platform, “To America’s great farmers: get ready to produce a lot of agricultural products to be sold within the US. Tariffs will be imposed on products coming from abroad starting on April 2. Enjoy.” Alongside the news flow related to Trump’s tariff policies, economists stated that in the data to be announced throughout the week concerning the labor market, including the non-farm employment report to be disclosed on Friday, hints about the state of the economy would be sought. Analysts highlighted that recent data indicating a softening in consumer demand has exacerbated concerns of economic slowdown and high inflation. They noted that fear of sticky inflation led the Federal Reserve to adopt a more cautious approach towards interest rate cuts and emphasized that this week’s employment data was significant for the future of monetary policy. The Institute for Supply Management (ISM) Purchasing Managers’ Index (PMI) for the manufacturing sector in the US stood at 50.3 in February, signaling expansion in the sector despite falling below market expectations. According to final PMI data for the manufacturing industry released by S&P Global, the PMI for manufacturing surpassed estimates by reaching 52.7 in February. The index registered the highest level in 32 months, indicating continued growth in the manufacturing sector for the second consecutive month. S&P Global Market Intelligence Chief Business Economist Chris Williamson stated that manufacturing production recorded its strongest increase since May 2022 and reported a rapid rise in new orders over the past year, raising concerns that despite improvements, there might be many short-lived factors. In January, construction spending in the US fell more than expected on a monthly basis by 0.2%. With these developments, the yield on the 10-year US Treasury bond dropped to 4.16%. Before Federal Reserve Chairman Jerome Powell’s speech on Friday regarding the economic outlook, statements from other Fed officials continued to be closely monitored by investors. St. Louis Fed President Alberto Musalem expressed expectations that the US economy will continue to expand this year but indicated growing concerns about possible risks to growth due to weaker-than-expected consumer spending, housing data, and reports from the business sector in recent times.