The S&P 500 closed in the red on Monday but recovered from session lows after President Donald Trump's decision to pause tariffs on Mexico temporarily eased fears of a worsening global trade war.

Market Recap:

• Dow Jones fell 161 points (-0.4%)
• S&P 500 dropped 0.9%
• Nasdaq Composite declined 1.3%

Trump's Tariff Delay Helps Soothe Trade War Jitters

Following a "very friendly" call with Mexican President Claudia Sheinbaum, Trump paused 25% tariffs on Mexico for one month after Mexico agreed to deploy 10,000 National Guard troops to secure the border.

💡 Key Details:
✅ Tariffs delayed for 30 days as the U.S. and Mexico negotiate
✅ Tariffs on Canada (25%) and China (10%) remain in place
✅ Trade-sensitive sectors see mixed reactions

How This Affects Inflation & The Federal Reserve

Economists warn that new tariffs could drive U.S. inflation higher, making interest rate cuts less likely.

📉 Capital Economics' Outlook:
"The resulting surge in U.S. inflation from these tariffs and other future measures is going to come even faster and be larger than we initially expected… The window for the Fed to resume cutting interest rates at any point over the next 12 to 18 months just slammed shut."

Stocks React to Tariff Uncertainty

Trade-sensitive stocks, including U.S. automakers and retailers, erased some of their losses:
🚗 Automakers:

• General Motors (NYSE:GM), Ford (NYSE:F), and Stellantis (NYSE:STLA) - all of which rely on Mexican imports for production

🍻 Consumer Goods:

• Constellation Brands (NYSE:STZ) - Mexican beer imports could face cost pressure

📊 Investor Takeaway
The Sector P/E Ratio API can provide insights into how trade-sensitive industries are reacting to these policy changes.