Saturday, August 2, 2025

Dow and S&P 500 See Major Losses as Tariffs Hit U.S. Economy

AP Newsis
AP Newsis

The New York Stock Exchange extended its losing streak for a second day on Tuesday, as investor sentiment worsened after U.S. President Donald Trump’s tariffs on Canada, Mexico, and China went into effect.

Starting that day, the Trump administration imposed a 25% tariff on goods from Mexico and Canada and an additional 10% tariff on Chinese products. Combined with the previous 10% tariff imposed last month, the total tariff on Chinese goods is 20%.

Tesla shares plummeted 4.4% due to concerns about CEO Elon Musk’s political ties, while NVIDIA rebounded with a 1.7% gain.

Meanwhile, stocks of banks, airlines, and cruise companies saw particularly steep declines.

Second Consecutive Day of Losses

All three major Wall Street indices—the Dow Jones Industrial Average, S&P 500, and Nasdaq—fell for the second straight day.

On this day, the Dow saw the most significant decline.

The Dow, comprising 30 large-cap stocks, plunged 670.25 points (1.55%) to 42,520.99.

The S&P 500, a broader market gauge, shed 71.57 points (1.22%) to close at 5,778.15.

The tech-heavy Nasdaq fared slightly better, falling 65.03 points (0.35%) to 18,285.16.

Despite initial drops of around 1.8%, a late-day rally in some tech stocks helped narrow the losses.

Dow’s Significant Drop

Financial, airline, and consumer goods stocks led the Dow’s decline.

Credit card company American Express tumbled $12.02 (4.07%) to $283.47, while Goldman Sachs Group, Inc. fell $24.12 (3.99%) to $581.44.

JPMorgan Chase’s stock dropped $10.37 (3.98%) to $250.25, and Visa’s dropped $9.59 (2.65%) to $352.23.

Though not part of Dow, Wells Fargo also fell $3.73 (4.84%) to $73.30, and Morgan Stanley dropped $7.41 (5.74%) to $121.72.

Boeing, the aircraft manufacturer, plummeted $11.16 (6.56%) to $158.90.

The decline was due to fears that tariffs could reduce consumer travel demand.

Office supplies and consumer goods manufacturer 3M also fell sharply, losing $7.56 (4.93%) to close at $145.86.

Travel Stocks Hit Turbulence

The travel sector was also severely impacted.

Concerns arose that as tariffs push up the prices of essential goods, consumers’ discretionary income would decrease, potentially curbing travel demand.

Airline and cruise line stocks took a nosedive.

United Airlines (UAL) dropped $5.46 (5.96%) to $86.21, while Delta Air Lines plummeted $3.76 (6.43%) to $54.69.

The U.S. Global Jets ETF, which invests in U.S. airlines, fell by $0.81 (3.38%) to $23.12.

In the cruise sector, Royal Caribbean sank $14.10 (5.85%) to $227.02, and Carnival fell $1.35 (5.80%) to $21.91.

Automakers Shift into Reverse

The automotive sector also felt the heat, as fears grew that Trump’s tariffs could disrupt the large North American automotive industry supply chain.

Tesla faced additional pressure amid speculation that Musk’s political connections could make the company a target for retaliatory measures.

While Tesla’s domestic production is less affected by tariffs, negative sentiment towards Musk could spark consumer boycotts.

Tesla shares fell by $12.61 (4.43%) to $272.04.

Detroit’s Big Three automakers also saw sharp declines.

General Motors dropped $2.16 (4.56%) to $45.22, while Stellantis, the joint venture between the U.S., Italy, and France, dipped $0.54 (4.38%) to $11.80.

Ford, however, which was expected to be less affected by the tariffs, only dropped by $0.27 (2.88%) to $9.12.

Nvidia and Alphabet Rebound

Nvidia and Alphabet managed to post gains.

Nvidia climbed $1.93 (1.69%) to $115.99, while Alphabet rose $3.91 (2.34%) to $170.92.

Microsoft saw a modest gain of $0.12 (0.03%) to close at $388.61.

Among the Magnificent 7 stocks, these three were the only ones to close higher.

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