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Indexes down: Dow 1.03%, S&P 500 0.73%, Nasdaq 0.52%

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PVH rises after upbeat annual forecast

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J&J falls after judge rejects $10 bln baby powder

settlement

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February's ISM manufacturing at 49

(Updates for market open)

By Sruthi Shankar and Pranav Kashyap

April 1 (Reuters) - U.S. stock indexes dropped on

Tuesday, as investors sifted through economic data and braced

for sweeping tariff announcements from the Trump administration.

U.S. manufacturing contracted in March after expanding two

consecutive months, while a measure of inflation at the factory

gate jumped to the highest level in nearly three years amid

rising anxiety over tariffs on imported goods.

A labor report also showed job openings fell to 7.568

million in February.

President Donald Trump is set to unveil "reciprocal

tariffs", aligning U.S. duties with those of other nations on

April 2. He said on Sunday the levies will include all countries

but specific details were scant.

The specter of economic disruption from the tariffs coupled

with aggressive AI investments by tech firms left Wall Street

reeling in the first quarter. The benchmark S&P 500

closed the quarter 4.6% lower, marking its most dismal

three-month stretch since July 2022.

The Washington Post reported White House aides have drafted

a proposal to impose tariffs of around 20% on most imports to

the United States.

The formal announcement is slated for 3 pm ET on Wednesday,

U.S. Treasury Secretary Scott Bessent told Fox News on Monday.

"Investors are on the sidelines because it's impossible to

get any kind of clear compass reading on the direction of the

economy until these tariffs are finalized," said Peter Andersen,

founder of Andersen Capital Management.

"The market is going to sway back and forth, but with a bias

to the negative side, because this is making it very difficult

for CEOs of companies to make any kind of estimates."

At 10:10 a.m. ET, the Dow Jones Industrial Average

fell 434.77 points, or 1.03%, to 41,567.33, the S&P 500

lost 40.74 points, or 0.73%, to 5,571.11 and the Nasdaq

Composite lost 89.91 points, or 0.52%, to 17,209.09.

Amid concerns that tariffs could hinder economic growth and

trigger inflationary pressures, investors have turned to U.S.

government bonds and gold as safe havens while shedding domestic

equities - particularly the high-flying tech stocks.

Trump has already implemented levies on imported aluminum

and steel, along with increased tariffs on goods from China.

Higher duties on cars will take effect on Thursday.

Goldman Sachs on Monday raised the probability of a U.S.

recession to 35% from 20% and said it expects more U.S. interest

rate cuts this year.

Among single stocks, Johnson & Johnson ( JNJ ) fell 4.9%,

dragging the broader healthcare sector to the bottom. A

U.S. bankruptcy judge rejected the company's $10 billion

proposal to end tens of thousands of lawsuits alleging its baby

powder and other talc products cause ovarian cancer.

Conservative news outlet Newsmax ( NMAX ) more than doubled

in value, following a more than 700% surge in its NYSE debut on

Monday.

PVH Corp ( PVH ) jumped 17% after the apparel maker's annual

earnings forecast beat analysts' estimates.

Tesla's shares gained 1.1% ahead of its

first-quarter vehicle deliveries report on Wednesday. Its shares

fell about 36% in the three months to March 31.

Declining issues outnumbered advancers for a 1.85-to-1 ratio

on the NYSE and a 2.09-to-1 ratio on the Nasdaq.

The S&P 500 posted four new 52-week highs and one new low,

while the Nasdaq Composite recorded 15 new highs and 249 new

lows.