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Wall Street falls after U.S. tariffs on metal imports, soft PMI data

Credit: REUTERS/BRENDAN MCDERMID

U.S. stocks fell on Monday after President Donald Trump said he would restore tariffs on metal imports from Brazil and Argentina, while weak domestic manufacturing data fanned worries of a slowing economy due to a prolonged trade war with China.

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Trump to restore tariffs on Brazil, Argentina imports

U.S. factory sector contracts again in November

Chinese PMI numbers better-than-expected

Retail stocks in focus on Cyber Monday

Indexes fall: Dow 0.80%, S&P 0.80%, Nasdaq 1.23%

Changes comment, updates market action

By Arjun Panchadar

Dec 2 (Reuters) - U.S. stocks fell on Monday after President Donald Trump said he would restore tariffs on metal imports from Brazil and Argentina, while weak domestic manufacturing data fanned worries of a slowing economy due to a prolonged trade war with China.

The U.S. economy's manufacturing sector contracted for a fourth straight month in November, as new order volumes slid back to around their lowest level since 2012. Construction spending also unexpectedly fell in October.

The figures were in sharp contrast to recent economic indicators that had reassured investors of a resilient domestic economy. Global markets had also cheered an unexpected rebound in Chinese manufacturing earlier in the day. MKTS/GLOB

However, Trump's tweet about restoring tariffs on U.S. steel and aluminum imports dampened sentiment. The news sent shares of U.S. steel makers including U.S. Steel Corp X.N and AK Steel Holding Corp AKS.N up 3.9% and 6.9%, respectively.

"It is all about the macro news today and that is basically overshadowing the good news on Black Friday and Cyber Monday," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

"The fact that the manufacturing sector is still in recession obviously also rekindles trade worries."

Energy shares .SPNY rose 0.54% tracking oil prices. O/R

The gains were an exception, with the other 10 major S&P 500 sectors trading lower. The technology sector .SPLRCT slipped 1.56% and was the biggest drag.

Retail stocks were in focus, with Cyber Monday sales expected to hit a record following $11.6 billion in online sales on Thanksgiving and Black Friday. Still, the S&P 500 retail sector .SPXRT was down 1.25%.

Wall Street had been on a record-hitting spree last month mainly on the back of hopes of a trade truce.

"We are coming off the market high ... any negative news is going to cause investors to take profits," Cardillo said.

At 11:41 a.m. ET the Dow Jones Industrial Average .DJI was down 224.00 points, or 0.80%, at 27,827.41, the S&P 500 .SPX was down 25.21 points, or 0.80%, at 3,115.77 and the Nasdaq Composite .IXIC was down 106.64 points, or 1.23%, at 8,558.83.

Among other stocks, Roku Inc ROKU.O dropped 16% after Morgan Stanley downgraded its shares.

Declining issues outnumbered advancers for a 2.38-to-1 ratio on the NYSE and a 2.53-to-1 ratio on the Nasdaq. The S&P index recorded 16 new 52-week highs and two new lows, while the Nasdaq recorded 54 new highs and 22 new lows.

(Reporting by Arjun Panchadar and Sanjana Shivdas in Bengaluru; Editing by Saumyadeb Chakrabarty, Arun Koyyur and Shounak Dasgupta)

((Arjun.Panchadar@thomsonreuters.com; within U.S. +1-646-223-8780; outside U.S. +918067492767;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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