US stocks showed worst losses since Christmas, as investors agonized over President Donald Trump’s threat to impose escalating tariffs on Mexico. On Friday, the S&P 500 lost 1.3% while Nasdaq fell by 1.5%. The Dow and S&P decreased by almost 7% each in May, and the Nasdaq went down by nearly 8% which is believed to the worst figure of months.
Trump’s word to set tariffs on Mexico resulted in unfavorable market conditions as shares of the major chunk of the market dropped significantly. The automobile sector, along with the beer makers and apparel masters felt the heat and showed downward trends. Shares of General Motors were dropped by 4%, Constellation Brands by 6% and Levi Strauss by 7%.
The expected rate of American duty to be applied to all imports from Mexico is 5%, effective from June. The duties are likely to be increased to 25% effective from October if Mexico does not restrict the movement of illegal immigrants to the US.
The 10-year Treasury yield was balanced for the greatest week by week slide since 2014 as merchants completely evaluated in two rate cuts for the year in the midst of apprehension over the danger of subsidence. The yield was recorded at 2.3% which is the lowest of nearly two years.
Apart from the decline of Mexican Peso by 2.4%, US oil prices also tumbled by 5.5% in anticipation of the tariff wars with Mexico and China. The market is quite pessimistic since China has decided to curb exports of rare earths to the US.
