(Updates with preliminary closing prices)

By Sinéad Carew and Pranav Kashyap

July 7 (Reuters) - Wall Street's major indexes closed

lower on Monday, after U.S. President Donald Trump announced

hefty tariffs against Japan, South Korea and other trading

partners while Tesla shares sank after CEO Elon Musk said he was

forming a new U.S. political party.

Indexes added to losses after Trump announced the tariff

rates against Japanese and South Korean imports, due to take

effect on

August 1

. Stocks wobbled further in the late afternoon when he

announced hefty tariffs on Malaysia, Kazakhstan, South Africa,

Laos and Myanmar.

Last week, both the Nasdaq and the S&P 500

ended three sessions with record high closes. The latest

record finishes came on Thursday after a

robust jobs report

.

"Markets had been telling us that peak tariff risk is

behind us but to have tariffs back in the forefront is causing

some skittishness," said Emily Roland, co-chief investment

strategist at Manulife John Hancock Investments in Boston.

"Investors were getting to that period of ebullience in markets

and we're taking a little step back from that."

But investors likely have some hopes the announcements

are not permanent, she said: "That's the pattern we've been in,

announcing punitive tariffs and then dialing that back a little

bit. That could certainly be the next phase of this back and

forth negotiation," said Roland.

According to preliminary data, the S&P 500

lost 49.39 points, or 0.77%, to end at 6,230.76 points,

while the Nasdaq Composite lost 183.18 points, or 0.89%,

to 20,417.92. The Dow Jones Industrial Average

fell 421.03 points, or 0.95%, to 44,400.64.

One of the S&P 500's biggest drags was from electric

vehicle maker Tesla, whose shares dived after CEO Musk

announced formation of a new political party named the "America

Party", further escalating his feud with Trump.

Investors also awaited other

U.S. trade announcements

after Trump said on Sunday that the U.S. was on the cusp

of several deals

and would notify other countries of higher tariffs by July

9, with new duties to take effect on August 1.

On Monday, Trump threatened an extra 10% tariff on countries

aligning themselves with the "Anti-American policies" of the

BRICS group of Brazil, Russia, India, China and South Africa.

In early April, stock indexes saw dramatic volatility after

Trump unveiled a base tariff rate of 10% on most countries and

additional duties ranging up to 50% on April 2 and then

announced a 90-day pause days later.

In early April, the Nasdaq confirmed a bear market

or a 20% drop from its recent record, while the S&P 500 had

narrowly averted a bear. Both indexes had returned to record

levels by late June.

Shares of WNS Holdings ( WNS ) rallied after the French IT

services firm Capgemini agreed to buy the outsourcing

firm for $3.3 billion in cash.

Trump's tariff policies have stoked inflation worries,

further complicating the Fed's path to lower rates. Minutes of

its June meeting, scheduled for release on Wednesday, should

offer more clues on the monetary policy outlook.

Traders are betting on a roughly 95% probability that

rates will remain unchanged in July while the odds for a

September cut are close to 60%, according to

CME Group's FedWatch tool

.

Another area of investor focus is U.S. tax-cut and spending

plans, signed into law by Trump late last week. These are

expected to swell the national deficit by over $3 trillion in

the next decade.