Stocks futures were mostly falling on Tuesday after President-elect Donald Trump said he would impose steep tariffs on Mexico, Canada, and China, signaling to the market that the protectionist promises he made on the campaign trail aren’t just talk.
Futures tracking the Dow Jones Industrial Average fell 27 points, or 0.1%, after the index hit a record on Monday. S&P 500 futures were also down 0.1%, putting the benchmark index at risk of snapping a six-day winning streak. Contracts tied to the tech-heavy Nasdaq 100 traded flat.
Trump wrote in a post on his Truth Social platform late Monday that he would impose a 25% tariff on all products coming into the U.S. from Mexico and Canada on day one of his presidency. He said in a separate post that he would place an additional 10% levy on products from China, but didn’t specify the timing of the move.
The Canadian dollar and the Mexican peso both fell against the U.S. dollar. The WSJ Dollar Index, which tracks the value of the greenback against 16 other currencies, climbed 0.2%.
Asian stocks slipped overnight and European equities were following suit early Tuesday, with investors worried that Trump could follow up tariffs on Mexico, Canada, and China with levies on goods coming into the U.S. from Europe. The continent’s flagship Stoxx 600 index fell 0.6%.
“Trump’s tariff threats against China, Mexico, and Canada sent shockwaves through global sentiment,” Hargreaves Lansdown equity analyst Matt Britzman said. “The President-elect’s scorched-earth approach has stoked fears of a trade war, with investors increasingly wary that Europe could be next in his crosshairs.”
Oil prices ticked up after U.S. officials said Israel’s security cabinet will vote on a ceasefire deal with Hezbollah on Tuesday. The Brent international benchmark rose 0.3% to $72.71 a barrel, and West Texas Intermediate U.S. crude was up 0.4% to $69.18 a barrel.
Bonds continued to rally as Trump’s pick of Wall Street veteran Scott Bessent to head up the Treasury Department eased investors’ concerns about the U.S. deficit. Yields on 10-year U.S. Treasury notes were down over the past 24 hours to 4.299%, and 2-year yields fell to 4.281%.