- The Dow Jones backslid on Monday, falling 740 points.
- Equity markets await the latest news on Trump tariff plans; details are expected on Tuesday.
- Manufacturing expectations dipped again, but price worries continue to rise.
The Dow Jones Industrial Average (DJIA) spun in a worried circle on Monday, opening the gates on a new trading week and holding near the 43,800 level before ongoing investor worries took hold and dragged the DJIA lower by around 740 points for the day. The major equity index continues to churn out a volatility-burdened pattern near key moving averages as investors await the latest iteration of United States (US) President Donald Trump’s tariff threats. Paradoxically, Trump’s tariffs are claimed to be both a masterful negotiating tactic by the Republican platform runner who doesn’t actually intend to impose import taxes on his own citizens, but also a critically necessary form of revenue generation for the US government that will be getting imposed no matter what. Whichever form the tariffs take tend to depend on who in the Trump administration is talking.
US President Donald Trump: 25% tariffs on Canada and Mexico to start Tuesday
PMI figures miss the mark ahead of another NFP Friday
Another Nonfarm Payrolls (NFP) week is on the books, with Friday’s key jobs data looming ahead. Things are off to a soft start after US ISM Purchasing Managers Index (PMI) survey results came in softer than expected. According to a sampling of key business operators, business activity expectations for March shrank slightly, with the ISM Manufacturing PMI falling to 50.3. The economic indicator is still holding above the key 50.0 level that typically separates contraction versus expansion expectations, but the one-month fall from February’s 50.9 accelerated through median market forecasts of a slight trim to 50.5.
US ISM Manufacturing Prices Paid accelerated however, bringing renewed inflation fears back into the picture. The indicator rose to nearly a two-year high as tariff fears continue to squeeze higher price pressures into the market. ISM Prices Paid expectations rose to 62.4 in March, rising from the previous print of 50.9 and blowing through the forecast of 56.2.
Dow Jones news
The Dow Jones started Monday on an almost hopeful note, but fresh social media posts from US President Donald Trump ended the day’s bullish potential, and now the majority of the DJIA is testing into the red. Reports surfaced that Nvidia (NVDA) products have been making their way to China despite US restrictions on Chinese access to US-produced microchips. Singapore is officially probing some of Nvidia’s key customers, including Dell (DELL) and Super Micro Computer (SMCI), who may have been putting Nvidia’s latest chipset, Blackwell, into servers and then shipping them to China in order to subvert export restrictions. Nvidia is down around 9%, tumbling below $114 per share.
Dow Jones price forecast
The Dow Jones continues to churn into the 50-day Exponential Moving Average (EMA) at 43,850, and price action is set for further downside explorations after the latest swing low found the 43,200 level. The DJIA is still holding well into bull country on the north side of the 200-day EMA at 42,100, however the ongoing bullish trend is beginning to grow long in the tooth. It has been 14 consecutive trading weeks since the Dow Jones set a new all-time high, and signs of exhaustion are beginning to set in as bidders get used to trading below the 44,000 handle.
Dow Jones daily chart
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
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