US stocks drop amid uncertainty over Trump's tariff plans

• Trump's 15% temporary surcharge under Section 122 will remain until late July after the Supreme Court wiped out emergency-powers tariffs, with the EU pausing its Washington trade deal approval in response
• AI-related stocks tumbled as CrowdStrike dropped 8.4% and AppLovin fell 8.2%, with investors worried about competition and questioning whether Big Tech's massive chip spending will yield profits ahead of Nvidia's Wednesday earnings
• Goldman Sachs analysts downplayed economic fears, noting that 'the bulk of the passthrough' from tariff costs to consumer prices had already occurred and forecasts on inflation and growth remain 'little changed'

Market Summary: US Stocks Drop Amid Tariff Policy Uncertainty

Market Performance:

US equities declined Monday following renewed tariff confusion. The Dow Jones fell 800 points (-1.6%), the S&P 500 dropped 1.2%, and the Nasdaq declined 1.3% as of early afternoon trading.

Key Developments:

President Trump raised a global tariff from 10% to 15% under Section 122 on Saturday, shortly after the Supreme Court struck down a key portion of his tariff policy. The temporary surcharge remains in effect until late July, creating ongoing trade uncertainty. The EU has suspended approval of its recently negotiated trade deal with Washington in response.

Sector Impact:

• AI/Tech: CrowdStrike plummeted 8.4% (down 24% YTD) amid concerns over Anthropic's code-scanning tool. AppLovin fell 8.2% as software stocks faced pressure from AI competition concerns.
• Airlines: Northeast blizzards grounded flights, sending United down 4.8%, American down 4.5%, and Delta down 3.5%.
• Commodities: Gold surged $100 to $5,226.90 as investors sought safe havens. Bitcoin briefly dipped below $65,000 before stabilizing.

Market Outlook:

Goldman Sachs analysts downplayed recession fears, stating much of the trade disruption is already priced in by companies globally, with inflation and growth forecasts "little changed." However, Morgan Stanley's Chris Larkin noted the Supreme Court ruling opened "a new chapter in the trade saga" rather than ending it.

The 10-year Treasury yield fell to 4.03% from 4.08% as Fed Governor Christopher Waller called March's rate decision "a coin flip" between a cut or hold. Nvidia earnings on Wednesday will be closely watched as investors question Big Tech's AI spending returns.