New York (Reuters) -Logobal markets on Monday peeked on a tumultuous session after US President Donald Trump started a trade war with caring tariffs in Canada, Mexico and China threatening to undermine economic growth and re -inflation.
The future of American shares has fallen in the early Asian hours, with Nasdaq Futures reduced 2.35% and S&P 500 future is 1.8% lower.
Canadian Prime Minister Justin Trudeau has announced plans for the retaliation of tariffs on the import of goods from the United States, the first of which would take effect on Tuesday. Claudia Sheinbaum, President of Mexico, on the Social Media Platform X said she would announce details about her response on Monday.
Two countries and the largest trade partners of the United States. China also said they would need “opposite measures”, and the president said that Americans could feel “some pain”.
US oil prices jumped over $ 2 because the Asian store started on Monday, while gasoline future jumped more than 3%.[O/R]
Uncertainty about how and how long the tariffs will bring freshly upset in the markets that have done a blow last week while the appearance of the Chinese model Deepseek AI has hit technological supplies.
The White House has not yet published all the details of the tariff plan, leaving questions about their impact and duration, while some analysts continued to throw out the chances of last-minit negotiations of delay or completely avoiding them.
Trump’s vague “pain” could come in the form of a lower American corporate profit and greater inflation, potentially increasing expectations from the US interest rate and further weaken currencies like Canadian dollars and Chinese Juan.
“So far, the market has been really on Trump’s side, but that could change and the market could cause it for the first time,” said Mark Malek, Chief Director of Investing in Siebert Financial in New York.
In three executive commands, Trump has imposed 25% of tariffs on Mexican and most of Canadian imports and 10% on goods from China, starting on Tuesday.
Canada announced that she would respond with 25% of tariffs to 155 billion US goods, starting at $ 30 billion for entry into force on Tuesday and $ 125 billion 21 days later.
“It’s negative for CAD, MXN and CNH, as well as for the overall risk,” said Nick Twidale, the main analyst on the ATFX Global market in Sydney, referring to Canadian, Mexican and Chinese currency.
Chinese offshore Yuan weakened at a record low 7,3765, while the dollar touched more than a 20-year maximum compared to a Canadian colleague. The dollar also strengthened more than 2% compared to the Mexican peso.
Mexican peso would suffer a fall near-12% if the United States hits Earth with 25% of trade tariffs, JPMORGAN estimated in a note published on Friday.
The euro slid more than 1% and hit a two -year -old low. [FRX/]
Analysts are also preparing for sale in stocks and other property with higher risk.
If the tariffs are imposed and they look that they will stay, maybe months, “supplies should sell out even though the sector sensitivity would distinguish,” said researchers Morgan Stanley in the note.
With the S&P 500 near the maximum of all time, the index could be moved 3% to 5% in any direction in the short term, Evercore Isi Strategy said in the note.
Tariff pain
The Barclays strategists have previously estimated that the tariffs can create 2.8% of the S&P 500 earnings, including projected outburst from retaliation of targeted countries.
Executive command involves the TRUMP provision to increase the size and extent of the tariff if the land affected seek revenge.
Economists Goldman Sachs estimated that the Tariffs on the entire plate in Canada and Mexico would mean increasing the basic inflation of 0.7% and 0.4% of the host on the gross domestic product.
The bank said on Sunday that it was expecting to update those estimates, and it predicted that the measures would not be permanent.
“In the light of their potential economic effects and the fact that the White House has set the general conditions for removing them, we think it is more likely that the tariffs will be temporary, but the odds are unclear,” the note said.
The possibility of increasing consumer prices is a particularly sensitive area for investors, who are concerned about the revival of inflation, which is why the federal reserves have stopped cutting rates.
Fed stopped his speed reduction cycle last week, while Feda Jerome Powell’s chairman said that officials “waited for them to see what policies they had been brought to” with the new president.
Klaas Knot European Central Bank, he said on Sunday that he expects new tariffs to lead to greater inflation and interest rates in the United States, which is likely to weaken the euro.
Assuming that the tariffs contribute to the increase in inflation, less likely that the US central bank will bring markets to interest rates to a wide range as a catalyst of growth, said the head of the Economy of the Economy of Capital Paul Ashworth in the note.
“In these circumstances, the FED window to continue reducing interest rates at any time in the next 12 to 18 months, he just closed himself,” he said.
(Reporting Suzanne McGee and Isla Binnie in New York and Dhara Ranasinghe in London; An additional reporting by Lewis KrauSpofa and Laura Matthews in New York and Tom Westbrook in Singapore; Montaz Megan Davies, Daniel Wallis, Elisa Martinuzzi, Will, Dunuzi, Diana Craft Coghill)
