U.S. stocks rebounded Monday following sharp monthly declines on Wall Street, but investor sentiment remained cautious amid soon-to-be-imposed tariffs.

At 09:35 ET (14:35 GMT), the Dow Jones Industrial Average gained 145 points, or 0.3%, the S&P 500 index rose 28 points, or 0.5%, and the NASDAQ Composite gained 125 points, or 0.7%.

Major stock indexes lost sharply in February, mainly due to volatility stemming from Trump tariffs and losses in tech on changing expectations around artificial intelligence.

Trump tariffs to take effect this week, uncertainty persists

The main U.S. stock indices pointed higher on Monday, but gains are tepid as investors geared up for a week of potential tariff developments and key economic data.

In a recent interview on Fox News, U.S. Commerce Secretary Howard Lutnick said that tariffs on imports from Mexico and Canada are scheduled to take effect on Tuesday. 

But Lutnick noted that the situation around the duties remains "fluid," adding that Trump will have the ultimate decision on the proposed 25% level on all items incoming from Mexico and non-energy imports from Canada.

He added that Trump was set to raise an additional 10% tariff on China.

ISM PMI data due

On the economic calendar on Monday, traders will be monitoring a key reading of U.S. factory activity in February.

The Institute for Supply Management’s purchasing managers’ index for last month is tipped to come in at 50.6, down from 50.9 in January.

Although the mark would be above the 50-point level that denotes expansion, it would signal a possible slowdown in growth in the manufacturing sector heading into the final month of the first quarter.

Meanwhile, the all-important nonfarm payrolls report is due out on Friday. The gauge of labor market health is expected to show that the U.S. economy added 156,000 roles in February, rising from 143,000 in the previous month.

“The economy has started 2025 on a weak footing with the ’negatives’ from President Trump’s policy thrust taking an early toll via weaker consumer confidence and spending at the same time as importers look to front run the threat of tariffs,” ING analysts said in a recent note.

Earnings estimates reduced

The quarterly earnings season is largely over, and resulted in Wall Street analysts cutting their first-quarter earnings estimates for S&P 500 companies by more than long-term averages, according to data from FactSet.

First-quarter estimates dropped by a combined 3.5% in the first two months of the year, FactSet said, with analysts also lowering their full-year earnings estimates by a combined 1% in January and February.

Elsewhere, stocks linked with the cryptocurrency market will be in the spotlight Monday after Bitcoin rose sharply, extending an overnight rebound after Trump listed five cryptocurrencies he will include in a strategic reserve, boosting crypto markets.

Trump on Sunday repeated his plans for a Crypto Strategic Reserve, stating that he had directed an executive group to proceed with the project. He claimed that Bitcoin, Ether, XRP, Solana, and Cardano will comprise the reserve.

Crude falls on peace deal hopes

Oil prices rose Monday, helped by the release of relatively upbeat manufacturing data from China, the world’s biggest crude importer. 

By 09:35 ET, the US crude futures (WTI) gained 0.5% to $70.11 a barrel, and the Brent contract rose 0.6% to $73.22 a barrel.

Data released over the weekend showed that Chinese manufacturing activity grew more than expected in February as local businesses still benefited from last year’s stimulus measures.

A private survey showed the same on Monday, with the Caixin manufacturing PMI hitting a 3-month high in February. 

Additionally, doubts have emerged over whether the U.S. will be able to broker a peace deal between Russia and Ukraine, especially after the spat between Trump and Ukraine President Volodymyr Zelenskiy over the weekend, which resulted in Zelenskiy leaving without signing a planned mineral supply deal.