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US flags August 1 as tariff deadline for some countries

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Longer-dated Treasuries up

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Tesla shares fall on Musk's political ambition

(Updates to early US afternoon trading)

By Caroline Valetkevitch

NEW YORK, July 7 (Reuters) - Major stock indexes

declined while the dollar strengthened against major currencies

on Monday as President Donald Trump unveiled 25% tariffs on

goods from Japan and South Korea and investors awaited further

announcements in the White House's trade negotiations.

Longer-dated U.S. Treasury

yields edged

higher.

Trump

said on Monday

the U.S. would impose a 25% tariff on imports from Japan

and South Korea beginning August 1 as he unveiled the first two

of what he has said will be a wave of letters to trading

partners outlining the new levies they face.

U.S.-listed shares of Japanese automotive companies

fell, with Toyota Motor down 4.1% and Honda Motor

off by 3.8%.

The United States will make several trade announcements in

the next 48 hours, Treasury Secretary Scott Bessent said earlier

on Monday, with a deadline set for Wednesday to get trade deals

done.

"We're down (in stocks) after the long weekend, and it's

somewhat of a critical week in terms of the tariffs," said Peter

Cardillo, chief market economist at Spartan Capital Securities

in New York.

"The prospect of what may or may not happen with the trade

deals... is causing investors to be somewhat cautious."

Tariffs are expected to increase prices and to slow down

growth, though uncertainty over the ultimate policies may be a

bigger drag as it leads businesses to postpone decisions.

S&P 500 companies are soon expected to begin reporting

results on the second quarter.

Trump announced in April a 10% base tariff rate on most

countries and higher "reciprocal" rates ranging up to 50%, with

an original deadline of this Wednesday.

However, he also said levies could range in value from

"maybe 60% or 70%," and threatened an extra 10% on countries

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

BRICS group of Brazil, Russia, India and China.

The Dow Jones Industrial Average fell 515.77 points,

or 1.15%, to 44,314.92, the S&P 500 fell 56.23 points, or

0.90%, to 6,222.20 and the Nasdaq Composite fell 195.58

points, or 0.97%, to 20,404.31.

Electric vehicle maker Tesla shares were down

7.4% after CEO Elon Musk announced the formation of a U.S.

political party named the "American Party."

MSCI's gauge of stocks across the globe

fell 7.06 points, or 0.76%, to 918.65. The pan-European STOXX

600 index closed up 0.44%.

The yield on benchmark U.S. 10-year notes

rose 5.1 basis points to 4.391%, from 4.34% late on Thursday.

The dollar index, which measures the greenback

against a basket of currencies, rose 0.58% to 97.53, with the

euro down 0.59% at $1.1709. Against the Japanese yen

, the dollar strengthened 1.04% to 146.02.

Minutes of the last Federal Reserve meeting are also due

this week. Investors are weighing how many times the Fed is

likely to cut interest rates this year after jobs data for June

on Thursday showed that employers added more jobs than

economists had forecast.

The Reserve Bank of Australia is widely expected to cut its

rates by a quarter point to 3.60% at a meeting on Tuesday, the

third easing this cycle, and markets imply an eventual

destination for rates of 2.85% or 3.10%.

U.S. crude rose 0.7% to $67.47 a barrel and Brent

rose to $69.21 per barrel, up 1.33% on the day.