Trump said on Thursday the U.S. would impose a 35% levy on imports from Canada, starting next month. He also floated a blanket 15% or 20% tariff rate on other countries, a step up from the current 10% baseline rate.
The 35% tariff is an increase from the current 25% rate that Trump had imposed on Canada in March. According to Trump, the new rate will go into effect on August 1 and could go up further if Canada retaliates.
He also said the European Union, which has been scrambling to strike a deal with Washington, would receive a formal letter later in the day.
At 06:58 a.m. ET, Dow E-minis were down 336 points, or 0.75%, U.S. S&P 500 E-minis were down 46 points, or 0.73%, and Nasdaq 100 E-minis were down 149.75 points, or 0.65%.
Markets have remained largely subdued this week, with the only highlight being Nvidia becoming the first company to breach the $4 trillion valuation milestone. Shares of the chip giant eased 0.5% in premarket trading. The S&P 500 and the tech-heavy Nasdaq are on track to end the week largely flat, while the Dow looks set to snap its three-week winning streak – the longest since January.
This week, President Trump widened his tariff offensive, targeting a number of countries, including allies Japan and South Korea, and introducing a new 50% tariff on copper.
Analysts are noting a growing sense of resilience among investors, who seem to be getting used to Trump’s tariff threats. Market moves in response to the new tariff announcements are far less choppier than the turbulence following early April’s “Liberation Day” announcements.
“It feels that the market has been rather sanguine…(about) the potential impact and hasn’t really been pricing in the risks that are now coming to the surface as we get more clarity over what the trade tariffs will be,” said Fiona Cincotta, senior market analyst at City Index.
Investors are also gearing up for the upcoming earnings season, which could offer better clarity on how trade uncertainties have affected corporations.
Wall Street’s big banks are scheduled to report quarterly results next week, with J.P. Morgan kicking off the earnings season on Tuesday.
The coming week is also packed with economic data releases, including those on consumer and producer price inflation and retail sales.
Investors are also betting on future interest rate cuts by the Federal Reserve, with odds for a September cut standing at 60.4%, according to CME FedWatch.
A stronger-than-expected jobs data last week has ruled out the likelihood of a July reduction.
Cryptocurrency stocks ticked up as bitcoin rose to a record high. Coinbase Global rose 1.8%, Bitfarms climbed 6.4%, Strategy and Riot Platforms advanced over 3.2%.
Denim maker Levi Strauss & Co jumped 6.7% after the company raised its annual revenue and profit forecasts and beat quarterly estimates on Thursday.
