SPX: S&P 500 Futures Nosedive After Trump Officially Kicks Off the Game of Tariffs

Canada, Mexico and China are now obligated to pay hefty tariffs on all imports. These three together account for 40% of all US imports. Inflation ahead?

💸 Futures Drop on Trade Fears

• Futures contracts tied to the S&P 500 were feeling blue Monday morning after a weekend of events which threatened to upend world trade as we know it. But before we dig into that, let’s check in on Wall Street.
• S&P 500 futures were down 2%, Dow futures were down 500 points and Nasdaq futures were down 2.4% ahead of the opening bell as investors were getting defensive. Trump’s tariff plans are casting a shadow over an otherwise strong earnings season, which is right now in its rush hour with Big Tech reporting.

🚨 Things Just Got Tariffic!

• Donald Trump over the weekend materialized his intention to slap tariffs on America’s biggest trade partners, risking to complicate or even turn hostile the country’s relationships with its allies. Canada and Mexico now have to pay a 25% tariff on imports to the US. China now has to pay 10% levies.
• These three countries together accounted for roughly 40% of all imports to the US in 2023. But the story doesn’t end here. Canada on Saturday pulled a retaliatory move and announced 25% tariffs on about $107 billion of US goods just about to be brought into the country. China threatened to “take necessary countermeasures to defend its rights and interests.”

💥 Phrase of the Week: Trade War

• By the looks of it, the upside in the stock market and overall global markets just got challenged. A potential trade war risks throwing a monkey wrench in the works and even flare up inflation again. And if that happens, the Federal Reserve could be prompted to hike interest rates.