US stocks fall on Trump tariff concerns, European defence firms soar

US stocks closed sharply lower Monday (Mar 3), after President Donald Trump slapped fresh sanctions against China and levies on Mexico and Canada neared imposition, while European defence shares soared as the European Union sought increased military spending over Ukraine.

The White House said Trump had signed an executive order raising tariffs on China to 20 per cent, shortly after Trump seemed to rule out any change to the planned 25 per cent tariffs against Mexico and Canada.
"The tariffs, you know, they're all set, they go into effect tomorrow," Trump said at the White House when a reporter asked whether the levies against the two US trading partners would come into force on Tuesday.

The Dow Jones Industrial Average slipped 1.5 per cent, while the broad-based S&P lost 1.8 per cent, and the tech-rich Nasdaq took a harsher tumble, closing down 2.6 per cent.

The CBOE Volatility Index, or VIX - colloquially known as Wall Street's "fear gauge" - surged, hitting its highest level since December.

But despite the uncertainty, "the backdrop remains a favourable one", Angelo Kourkafas from Edward Jones told AFP.

Monday's trading, he added, was "consistent with the choppiness we have seen over the past three months" in the financial markets.