US STOCKS-Wall St slides on losses in software, financials amid global tariff angst

By Shashwat Chauhan and Ragini Mathur

Feb 23 (Reuters) - Wall Street's main indexes dropped on Monday, led by declines in software and financials, as uncertainty around tariffs intensified after President Donald Trump announced new levies following a Supreme Court ruling last week.

The Supreme Court in a Friday ruling voided most of the tariffs Trump imposed last year, finding that the emergency law he relied on did not allow their imposition.

Using a different statute, Trump announced first a 10%, then a 15%, global levy that could last five months while the administration searches for more durable workarounds.

"Tariff policy can be capricious and very subject to one person's whims and that's not good for the market. It just creates uncertainty and markets don't like uncertainty," said Steve Sosnick, chief market analyst at Interactive Brokers.

Financials .SPSY were the biggest drags on the benchmarks, with Citigroup C.N down 5.4%, while JPMorgan Chase JPM.N and Wells Fargo WFC.N dropped more than 4% each.

Software-related companies were also among the top decliners. The S&P 500 Software and Services index .SPLRCIS was down 3.8%, extending its 23.5% drop so far this year, as AI disruption fears hit the sector.

Analysts also pointed to a Citrini Research report on X.com that highlighted AI-related risks for the sector.

At 12:04 p.m. ET, the Dow Jones Industrial Average .DJI fell 746.58 points, or 1.50%, to 48,879.39, the S&P 500 .SPX lost 72.64 points, or 1.05%, to 6,836.87, and the Nasdaq Composite .IXIC declined 273.80 points, or 1.20%, to 22,612.27.

Most megacap and growth stocks also traded lower, though Nvidia NVDA.O bucked the trend, up 0.6% ahead of its quarterly earnings due on Wednesday. Investors will watch out for any remarks from the world's largest company by market capitalization for insights on the AI space.

The S&P 1500 passenger airlines index .SPCOMAIR dropped 3.8%, while the S&P 500 hotels, restaurants and leisure index .SPLRCHRL shed 2.7% as powerful blizzard dropped more than a foot of snow across parts of the U.S. Northeast, bringing travel to a near standstill in the region.

The healthcare index .SPXHC, however, rose 1.1%, boosted by a 5.3% gain in Eli Lilly LLY.N after rival Novo Nordisk's NOVOb.CO obesity drug fell short against its drug in a Copenhagen trial.

All three main U.S. indexes were set to post losses for the month, as high stock valuations and AI disruption fears pressured technology and other sectors, with investors questioning if massive AI spending is paying off.

Among other movers, Domino's Pizza DPZ.O climbed 2.4% after the fast-food chain beat Wall Street estimates for fourth-quarter U.S. same-store sales.

PayPal PYPL.O jumped 5.9% after Bloomberg News reported that the payments firm is attracting takeover interest.

Elsewhere, Federal Reserve Governor Christopher Waller said he was open to keeping rates unchanged in March if February jobs data shows the labor market has strengthened after a weak start to 2025.

Declining issues outnumbered advancers by a 2.52-to-1 ratio on the NYSE and by a 2.65-to-1 ratio on the Nasdaq.

The S&P 500 posted 38 new 52-week highs and 16 new lows, while the Nasdaq Composite recorded 59 new highs and 208 new lows.