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Stocks fall further after Trump announces tariffs

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ISM manufacturing PMI at 50.3 in February

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Intel ( INTC ) erases early gains, closes lower

(Updates to 4 pm ET)

By Johann M Cherian, Sukriti Gupta and Chibuike Oguh

NEW YORK, March 3 (Reuters) - Wall Street's main stock

indexes slipped on Monday after President Donald Trump announced

the start of 25% tariffs on Canada and Mexico, and after data

showed a slight dip in U.S. manufacturing.

Stocks slipped after an ISM survey and extended losses after

Trump said 25% tariffs on Canada and Mexico will go into effect

on Tuesday with reciprocal tariffs starting April 2. He said the

North American countries had "no room left" to avert the

tariffs.

The ISM survey showed manufacturing PMI slipped to 50.3 last

month from 50.9 in January, while the forward-looking new orders

index contracted to 48.6 in February from 55.1 in January. The

dip in the PMI mirrored declines in other sentiment measures as

investors worried about tariffs.

"I think it's just more of a continuation of a string of bad

economic news that tends to put a little bit of a dampener on

the optimism that we saw from the fourth quarter earnings that

were getting released, which were pretty good," said James St.

Aubin, chief investment officer at Ocean Park Asset Management

in Santa Monica, California.

"You've got a lot of policy uncertainty from Trump.

Certainly layoffs are part of that but also the trade policy. I

think that's all working against the positive sentiment forcing

that sort of glass-half-full mentality into a back seat position

and bringing out some of the bearish glass-half-empty mindset

that comes and goes."

According to preliminary data, the S&P 500

lost 104.19 points, or 1.75%, to end at 5,850.31 points,

while the Nasdaq Composite lost 497.09 points, or 2.64%,

to 18,350.19. The Dow Jones Industrial Average

fell 643.61 points, or 1.47%, to 43,197.30.

Recent reports of softening consumer demand have spurred

fears of an economic slowdown and higher inflation. Trump has

threatened that an extra 10% duty on imports from China will

also take effect on Tuesday, which could spark retaliation from

Beijing.

U.S.-listed shares of Chinese companies fell, with Nio

and JD.com ( JD ) off about 6% and 1%, respectively.

Worries about sticky inflation have made the Federal Reserve

more cautious on interest rate cuts, but this week's employment

and business activity data could change the central bank's view.

Traders have been betting on at least two interest rate cuts

of 25 basis point each from the Fed by December, according to

data compiled by LSEG.

Tesla erased early gains. Morgan Stanley ( MS ) had

reinstated the stock as "top pick" among U.S. autos.

Chipmaker Intel closed lower, erasing gains that

came in early trade after a report that chip designers Nvidia ( NVDA )

and Broadcom ( AVGO ) were running manufacturing tests

with the company.