Shares fell sharply on Monday afternoon after President Trump affirmed tariffs on imports from Canada and Mexico, dashing buyers’ hopes of a last-minute reprieve and intensifying concern that the sweeping tariffs may hit company income and gasoline inflation.

The S&P 500 fell 1.8 p.c, the index’s greatest each day drop this 12 months. The technology-heavy Nasdaq fell 2.6 p.c, almost crossing the edge for the index to be in a “correction,” outlined as a sell-off of greater than 10 p.c from a latest peak. The Nasdaq is now simply over 9 p.c beneath its excessive in mid-December.

The afternoon droop within the markets adopted Mr. Trump’s assertion on the White Home on Monday that he would move forward on Tuesday with broad 25 p.c tariffs on Canada and Mexico, the US’ two greatest buying and selling companions. Mr. Trump has additionally stated he would impose an extra 10 p.c tariff on items from China, on high of the ten p.c that took impact final month.

Buyers worry that the tariffs will elevate costs in the US, pushing the Federal Reserve to maintain rates of interest elevated for longer and risking tipping the financial system right into a downturn.

Monday’s sell-off got here after the inventory market had already misplaced a few of its shine in February. The S&P 500 ended about 1.4 percent lower for the month, because the Trump administration’s coverage priorities and weak shopper sentiment made buyers uneasy.

On Monday, the Russell 2000 index of smaller firms, that are usually extra uncovered to the ebb and circulation of the financial system, fell 3.1 p.c, pushing additional into its personal correction; the index is down greater than 14 p.c because it peaked in late November. The Vix volatility index, also referred to as Wall Avenue’s “worry gauge,” rose sharply to 24 factors, earlier than easing to round 22, nonetheless above its long-term common.

Mr. Trump’s feedback on tariffs prolonged the inventory market’s declines from earlier within the day, when a February studying for a key manufacturing index got here in weaker than buyers had anticipated, an indication of slower progress within the sector.