As investors considered new U.S. tariffs on goods from important trading partners and their possible effects on the economy and business profits, stock futures fell early Monday to begin a new trading month.
Dow Jones Industrial Average-linked futures fell 546 points, or 1.22%. Nasdaq-100 futures down 1.7%, while S&P 500 futures fell 1.4%.
The PresidentOn Saturday, Donald Trump imposed a 25% tariff on Canadian and Mexican imports. Additionally, he imposed a 10% tax on Chinese imports. Between the three nations, the U.S. does business worth approximately $1.6 trillion.
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Mexico stated it will look into imposing duties on U.S. imports, while Canada responded with its own retaliatory measures. Meanwhile, the Chinese government announced that it will sue the World Trade Organization.
The remainder of Trump’s tariff strategy may now need to be taken literally by markets rather than only seriously. In a note, Tobin Marcus, head of U.S. policy and politics at Wolfe Research, warned that Monday would be a difficult day for markets if this new level of seriousness is abruptly priced in.
Futures for oil and gasoline increased in value following the U.S. tariffs. The US dollar rose as well.
As fears about tariffs increase and artificial intelligence stocks continue to be scrutinized, traders are also anticipating the most significant week for fourth-quarter earnings, which have grown in significance in assessing the market’s condition. More than 120 S&P 500 businesses, including digital titans like Amazon, Palantir, and Alphabet, as well as consumer behemoths like Walt Disney and Mondelez, are scheduled to release their results.
The employment picture so far this year will be colored by the release of the January nonfarm payrolls report on Friday. According to a Dow Jones poll of economists, 175,000 new jobs were created last month. It is anticipated that the 4.1% unemployment rate has not changed.
After a few weeks of volatility, stocks are already recovering. Traders completed the first month of the year with gains, despite the fact that the three main U.S. indices started Friday’s trading session lower. In January, the tech-heavy Nasdaq Composite increased 1.6% and the S&P 500 gained 2.7%, but the Dow Jones Industrial Average exceeded, rising 4.7%.