Dow and S&P 500 recover some losses after Trump pauses tariffs on Mexico

The stock market fell on Monday amid uncertainty about the fate of tarrif imposed by President Donald Trump on Canada, Mexico and China over the weekend.

Soon after a market decline began early Monday morning, Trump paused the tariffs on Mexico for one month following a conversation with Mexican President Claudia Sheinbaum, prompting the stock market to recover some of its losses.

The Dow Jones Industrial Average slid about 150 points, or 0.35%, in early trading on Monday. The S&P 500 dropped 0.7%, and the tech-heavy Nasdaq ticked down 1%.

Traders demonstrated their jitters with a selloff of U.S. auto companies, which hold deep ties to suppliers in Canada and Mexico. Shares of General Motors fell 2%, while Ford saw its stock price drop 1.3%.

The market downturn extended worldwide. Japan's Nikkei index fell 2.5% on Monday, and the pan-European STOXX 600 dropped about 1%.

On Saturday, Trump imposed 25% tariffs on products from Mexico and Canada, as well as 10% tariffs on goods from China. The tariffs are set to take effect on Tuesday, the White House said.

Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum both responded within hours of the announcement, vowing to retaliate.

Trudeau said Canada will implement 25% tariffs on $155 billion worth of U.S. goods, while Sheinbaum said she has instructed officials in her government to implement what she called Plan B, "which includes tariff and non-tariff measures in defense of Mexico's interests."