Major U.S. stock indices closed lower on Monday, pressured by declines in financial and software stocks. The downturn followed an announcement from U.S. President Donald Trump that the "global import tariff" rate on goods entering the United States would increase from 10% to 15%. He further warned that higher tariffs could be imposed on countries attempting to "play games" following a Supreme Court ruling.
At market close, the Dow Jones Industrial Average fell by 821.91 points, or 1.66%, to finish at 48,804.06. The Nasdaq Composite dropped 258.80 points, or 1.13%, settling at 22,627.27. The S&P 500 index declined by 71.76 points, or 1.04%, closing at 6,837.75. Precious metals and non-ferrous metal sectors led the gains, while application software and information technology services were among the biggest decliners.
Shares of IBM experienced a significant drop of over 13%, marking their largest single-day decline since 2000. This sell-off occurred after AI startup Anthropic indicated that its Claude Code tool could assist in modernizing the outdated COBOL programming language. The Nasdaq Golden Dragon China Index fell nearly 1%. Other notable decliners included Adobe and Oracle, each down approximately 4.6%, Salesforce, which fell 3.7%, and Microsoft, declining 3.2%.
In European markets, Germany's DAX 30 index fell 258.99 points, or 1.03%, to 24,987.81. The UK's FTSE 100 index decreased by 8.14 points, or 0.08%, to 10,678.75. France's CAC 40 index dropped 18.32 points, or 0.22%, to 8,497.17. The Euro Stoxx 50 index declined by 16.66 points, or 0.27%, to 6,114.65. In contrast, Spain's IBEX 35 index rose 123.20 points, or 0.68%, to 18,287.30, and Italy's FTSE MIB index gained 213.52 points, or 0.46%, to 46,686.50.
In the cryptocurrency market, Bitcoin fell nearly 4% to $64,958.23, while Ethereum declined 4.6% to $1,867.42.
Oil prices edged lower. Brent crude futures fell $0.27, or 0.38%, to settle at $71.49 per barrel. West Texas Intermediate (WTI) crude futures on the New York Mercantile Exchange dropped $0.17, or 0.26%, to close at $66.31 per barrel.
Precious metals saw broad gains. Spot gold rose 2.35% to $5,228.03 per ounce, while spot silver surged above $88.
On the macroeconomic front, U.S. House Speaker Mike Johnson stated on Monday that Congress is unlikely to reach a consensus on legislation to codify President Trump's tariff agenda following the Supreme Court's recent decision to overturn the government's broad tariff policy. Johnson noted that finding a legislative path forward on tariffs would be challenging, shifting focus to the executive branch's actions and response to the ruling.
President Trump addressed tensions with Iran, signaling a preference for diplomacy over conflict. He refuted media reports suggesting General Daniel Caine (sometimes referred to as Razin) was opposed to war with Iran, calling them completely false. Trump stated that while no one wants war, he believes the U.S. would prevail easily in a military confrontation. He emphasized that he prefers reaching a deal but warned that failure to do so would have severe consequences for Iran.
European Central Bank President Christine Lagarde commented that Europe can still benefit from artificial intelligence even if it lags in developing frontier models. Speaking in Washington, she suggested that greater economic returns may come from applying AI tools across the broader economy, particularly in manufacturing and industrial processes, where Europe holds an advantage. She cited a survey indicating that EU manufacturing firms lead U.S. counterparts in using AI, big data, and deploying robots, suggesting Europe's industrial base could be its most significant asset. This contrasts with the widespread view that Europe trails the U.S. in AI adoption and innovation, a point highlighted in a 2024 report by former ECB President Mario Draghi linking low regional productivity to missing out on the first digital revolution.
In corporate news, PayPal is attracting acquisition interest after its stock price plummeted, wiping out nearly half of its market value. Sources indicate the San Jose-based company has held meetings with several banks among proactively contacted suitors. At least one major competitor is considering a full acquisition, while other parties are only interested in parts of PayPal's assets. Sources caution that interest is preliminary and may not lead to a deal. A pioneer in digital payments founded in the late 1990s, PayPal has faced challenges as customers increasingly shift to other payment methods. Its stock has fallen approximately 46% over the past 12 months, giving it a market capitalization of around $38.4 billion.
ASML researchers revealed a breakthrough in EUV light source technology that could increase chip production yields by up to 50% by the end of the decade. ASML is the sole global producer of commercial extreme ultraviolet (EUV) lithography machines, crucial tools for chipmakers like TSMC and Intel. Michael Purvis, ASML's chief technology expert for EUV, stated that the system can stably output 1,000 watts of power under conditions matching actual customer use, calling it a real achievement, not a short-duration demonstration trick.
Regarding analyst ratings, DA Davidson maintained a Buy rating on NVIDIA with a $250 price target. Wells Fargo lowered its price target on Amazon to $304 from $305.