GLOBAL MARKETS-Stocks fall, dollar up as Trump plans 25% tariffs on Japan, South Korea

By Caroline Valetkevitch

NEW YORK, July 7 (Reuters) - Major stock indexes declined while the dollar strengthened against major currencies on Monday as President Donald Trump unveiled 25% tariffs on goods from Japan and South Korea and investors awaited further announcements in the White House's trade negotiations.

Longer-dated U.S. Treasury yields edged higher.

Trump said on Monday the U.S. would impose a 25% tariff on imports from Japan and South Korea beginning August 1 as he unveiled the first two of what he has said will be a wave of letters to trading partners outlining the new levies they face.

U.S.-listed shares of Japanese automotive companies fell, with Toyota Motor TM.N down 4.1% and Honda Motor HMC.N off by 3.8%.

The United States will make several trade announcements in the next 48 hours, Treasury Secretary Scott Bessent said earlier on Monday, with a deadline set for Wednesday to get trade deals done.

"We're down (in stocks) after the long weekend, and it's somewhat of a critical week in terms of the tariffs," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

"The prospect of what may or may not happen with the trade deals... is causing investors to be somewhat cautious."

Tariffs are expected to increase prices and to slow down growth, though uncertainty over the ultimate policies may be a bigger drag as it leads businesses to postpone decisions.

S&P 500 companies are soon expected to begin reporting results on the second quarter.

Trump announced in April a 10% base tariff rate on most countries and higher "reciprocal" rates ranging up to 50%, with an original deadline of this Wednesday.

However, he also said levies could range in value from "maybe 60% or 70%," and threatened an extra 10% on countries aligning themselves with the "anti-American policies" of the BRICS group of Brazil, Russia, India and China.

The Dow Jones Industrial Average .DJI fell 515.77 points, or 1.15%, to 44,314.92, the S&P 500 .SPX fell 56.23 points, or 0.90%, to 6,222.20 and the Nasdaq Composite .IXIC fell 195.58 points, or 0.97%, to 20,404.31.

Electric vehicle maker Tesla TSLA.O shares were down 7.4% after CEO Elon Musk announced the formation of a U.S. political party named the "American Party."

MSCI's gauge of stocks across the globe .MIWD00000PUS fell 7.06 points, or 0.76%, to 918.65. The pan-European STOXX 600 .STOXX index closed up 0.44%.

The yield on benchmark U.S. 10-year notes US10YT=RR rose 5.1 basis points to 4.391%, from 4.34% late on Thursday.

The dollar index =USD, which measures the greenback against a basket of currencies, rose 0.58% to 97.53, with the euro EUR= down 0.59% at $1.1709. Against the Japanese yen JPY=, the dollar strengthened 1.04% to 146.02.

Minutes of the last Federal Reserve meeting are also due this week. Investors are weighing how many times the Fed is likely to cut interest rates this year after jobs data for June on Thursday showed that employers added more jobs than economists had forecast.

The Reserve Bank of Australia is widely expected to cut its rates by a quarter point to 3.60% at a meeting on Tuesday, the third easing this cycle, and markets imply an eventual destination for rates of 2.85% or 3.10%. 0#AUDIRPR

U.S. crude CLc1 rose 0.7% to $67.47 a barrel and Brent LCOc1 rose to $69.21 per barrel, up 1.33% on the day.

      
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