US stocks lost ground on Monday in reaction to President Donald Trump’s announcement of tariffs on China, Mexico, and Canada. But the major averages pared losses mid-morning after Trump said he would delay tariffs against Mexico by a month.

The tech-heavy Nasdaq Composite (^IXIC) was down around 1.3%, recouping a chunk of its earlier losses. Meanwhile, the S&P 500 (^GSPC) fell roughly 0.8%, and the Dow Jones Industrial Average (^DJI) moved 0.3% lower.

Consumer discretionary (XLY) stocks, which includes automakers, were the hardest hit early in the day. Tech (XLK) also dragged on markets as shares of AI chip giant Nvidia (NVDA), iPhone maker Apple (AAPL) and EV manufacturer Tesla (TSLA) all fell.

The tariffs, initially set to take effect on Tuesday, include 25% duties on Canada and Mexico, and 10% on China. Energy imports from Canada will carry a lower 10% duty.

But after a Monday morning call with Mexico's president Claudia Sheinbaum, Trump delayed the implementation of tariffs on its imports. He said Sheinbaum agreed to send Mexican soldiers to the border to stop the flow of fentanyl and illegal migrants into the US.

"We further agreed to immediately pause the anticipated tariffs for a one-month period, during which we will have negotiations headed by Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, and Secretary of Commerce Howard Lutnick, and high-level Representatives of Mexico," Trump said.

The US dollar index (DX-Y.NYB, DX=F) took a leg lower, having earlier surged to trade near its highest levels in two years. On the oil front, West Texas Intermediate futures (CL=F) were broadly flat, coming off a jump of well over 2%.

Trump's tariff announcement over the weekend initially sparked retaliatory statements, as Canadian Prime Minister Justin Trudeau said his country will place 25% counter-tariffs on around $107 billion in American-made products. Trump said he spoke with Trudeau early Monday and plans to do so again this afternoon.

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