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Stock Futures Slip After Trump Slaps Tariffs on Canada

U.S. stock futures edged lower on Tuesday after President Donald Trump announced sweeping new tariffs on Canadian goods, reigniting trade tensions and weighing on investor sentiment. The dollar rose sharply in response, while equity markets braced for potential fallout across sectors exposed to global trade.

S&P 500 futures were down 0.3%, Nasdaq futures fell 0.4%, and Dow futures slipped 120 points in early pre-market trading. The fresh wave of tariffs—set at 35% on a range of Canadian imports—has added a new layer of uncertainty just weeks ahead of key trade negotiation deadlines. Reuters

Tariff Announcement Shakes Confidence

Trump’s latest move, described by the White House as a “protective measure to balance trade,” comes amid rising friction between Washington and Ottawa over trade surpluses and regulatory practices. The surprise announcement caught investors off guard and sent ripples through markets already jittery from existing geopolitical pressures. TheStar

Analysts warn that retaliatory action from Canada could be swift, potentially impacting sectors such as agriculture, energy, and automotive manufacturing. Investors are also concerned about possible delays in cross-border supply chains and price increases in consumer goods.

Dollar Rises as Risk Appetite Wanes

The U.S. dollar gained ground against a basket of major currencies, with the USD/CAD pair rising over 0.6% to 1.3775. The greenback’s strength reflects growing demand for safe-haven assets as traders rotate out of riskier equities and into more stable positions. The Malaysia Reserve

Meanwhile, Treasury yields slipped slightly, and gold prices remained firm, underscoring the broader shift toward defensive strategies amid trade uncertainty.

Outlook: Cautious but Watching the Fed

Market participants now turn their attention to potential policy responses from central banks. While the Federal Reserve is expected to hold rates steady at its upcoming meeting, increased trade disruptions could influence forward guidance, especially if inflation pressures build from higher import costs. 

Investors will also be watching for comments from Canadian and U.S. trade officials, who are expected to respond publicly to the tariffs later this week. Volatility is likely to remain elevated as markets digest the long-term implications of rising protectionism.

 

 

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