Following Donald Trump’s announcement that a 25% import duty on products from Canada and Mexico would start on Tuesday, the New York Stock Exchange ended the day with a sharp decline. At the close, the Dow Jones index fell by 1.48% to 43,192.04 points, the S&P 500 index dropped by 1.76% to 5,849.88 points, and the Nasdaq index decreased by 2.64% to 18,350.19 points. During the first trading day of the week, developments in the US administration’s tariff policies and macroeconomic data were at the forefront for investors, leading to a negative trend in the equity markets. As the one-month grace period given by the US to Mexico and Canada regarding the tariffs came to an end, Trump stated that a 25% import duty would be imposed on products imported from these countries starting on Tuesday. In February, Trump had imposed a 25% import duty on goods from Canada and Mexico, but later suspended the tariffs for one month after announcing measures to enhance border security. He also mentioned that an additional 10% tariff would be levied on goods imported from China on top of the existing 10% duty. President Trump reminded that reciprocal tariffs would begin on April 2nd, which were later doubled to 20%. Trump also shared a post on his Truth Social account, saying, “Prepare to produce numerous agricultural products that will be sold within the US to our great farmers. Tariffs will be imposed on products coming from abroad on April 2nd. Enjoy.” Apart from the news related to Trump’s tariff policies, analysts indicated that macroeconomic data also affected investor sentiment. They highlighted the importance of forthcoming employment reports concerning the labor market and the clues they could provide about the state of the economy. The recent data indicating a softened consumer demand raised concerns about economic slowdown and high inflation among analysts. These fears of sticky inflation led the Federal Reserve (Fed) to adopt a more cautious approach towards interest rate cuts and underscored the significance of employment data to be disclosed this week for the future course of monetary policy. In the US, the Institute of Supply Management’s (ISM) Manufacturing Purchasing Managers Index (PMI) fell below market expectations in February at 50.3, yet still signified an expansion in the sector. The final PMI data released by S&P Global regarding the manufacturing industry also showed that the sector’s PMI exceeded expectations at 52.7 in February. Despite the improvement, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, mentioned that there were numerous factors indicating that the uptick might be short-lived. Construction spending in the US also declined more than expected by 0.2% on a monthly basis in January. Consequently, the yield on the 10-year US Treasury note fell to 4.16%. Market participants continued to monitor remarks from other Fed officials prior to Fed Chair Jerome Powell’s economic outlook speech scheduled for Friday. St. Louis Fed President Alberto Musalem expressed expectations for the US economy to continue its expansion this year but highlighted growing concerns regarding potential risks to growth due to weaker-than-expected consumer spending and housing data, as well as reports from the business sector.