Stock Futures Plummet as Trump Imposes Tariffs on Key Trading Partners

The Dow futures were down 1.4%, or over 600 points, while S&P 500 futures dropped 1.9%. The futures traded for tech-heavy Nasdaq Composite were down 2.4% as of 6:36 p.m. ET. Bitcoin was also down 3.5% over the last 24 hours.

The sharp selloff in the futures market implies the indexes will also open substantially lower when trading kicks off Monday at 9:30 a.m. ET.

Hours after the Trump administration announced the tariffs, Mexican President Claudia Sheinbaum said her country will impose retaliatory tariffs, and Canadian Prime Minister Justin Trudeau announced "far-reaching" retaliatory levies. China’s commerce ministry said it will file a complaint with the World Trade Organization and "take corresponding countermeasures," without elaborating.

"This will include immediate tariffs on $30 billion worth of goods as of Tuesday, followed by further tariffs on $125 billion of American products in 21 days' time, to allow Canadian companies and supply chains to seek to find alternatives," Canadian Prime Minister Justin Trudeau said Saturday.

More than 1,200 goods will be impacted by Canada’s immediate tariffs, according to senior government officials on Sunday. The imposed tariffs would be harmful for states such as Florida, which exports orange juice, fruits, and vegetables to Canada, officials said.

Both the Mexican peso and the Canadian dollar weakened relative to the US dollar in the 24 hours since Trump announced the new tariffs, while the Chinese yuan hit a new low.

Economists warned that American families may bear the burden of these tariffs—and Trump posted to his Truth Social account that Americans could face "some pain." The tariffs will make groceries more expensive because Mexico and Canada are the main sources of America’s imported agricultural goods. Gas, steel, and cars are among other goods expected to be more expensive for American consumers.

CNN’s Elisabeth Buchwald contributed to this report.

This story has been updated with additional content.

Behind the rally in the dollar is the bet that tariffs will fuel inflationary pressures and keep US interest rates elevated, while also hurting foreign economies more than the US and adding to the greenback’s safe-haven lure. Foreign currencies get hurt as American demand declines for costlier imports.

By Hormaz FatakiaFebruary 3, 2025, 5:14:54 AM IST(Updated)3 Min ReadUS stock futures have sold-off sharply on Sunday night, in response to Donald Trump's tariff imposition on Canada, Mexico and China, in what may be a precursor to a tumultuous week ahead for global equities.CompanyValueChange%ChangeThe Dow futures are down over 620 points as of 6:20 PM Eastern Time, the S&P 500 futures are down close to 2% or over 100 points, while the Nasdaq futures are also down close to 575 points.On the flip side, the US Dollar has surged nearly 1% to head back to levels of 109.4, after briefly correcting to levels of 107. The strength in the greenback has sent the Canadian Dollar to its weakest since 2003, the Euro to its lowest since November 2022 and the Mexican Peso to its lowest in nearly three-years.Behind the rally in the dollar is the bet that tariffs will fuel inflationary pressures and keep US interest rates elevated, while also hurting foreign economies more than the US and adding to the greenback’s safe-haven lure. Foreign currencies get hurt as American demand declines for costlier imports.US President Donald Trump imposed a 25% tariff on imports from Canada and Mexico, along with a 10% tariff on China. The loophole of parcels below $800 entering the US tariff-free was also done away with.In response, Canada has already imposed a counter 25% tariff on US goods worth over $100 billion, while Canadian provinces have begun taking US alcohol off the shelves. Mexico has promised retaliatory measures on Monday, while China has vowed to escalate this at the World Trade Organisation, but has not unveiled any new counter-tariffs yet.In anticipation of what was to transpire on Saturday, the Nasdaq Golden Dragon index, an index of Chinese companies listed in the US, fell 3%. Chinese stock markets will be shut today on account of the Lunar new year, while Hong Kong-listed Chinese stocks will be in focus.The tariffs will take affect at 12:01 AM on Tuesday, US time, which has left speculations open as to whether something can be negotiated within the next 24 hours between the countries so that the tariffs come to a halt.Earlier, Donald Trump had imposed a 25% "Emergency Tariff" on Colombia, after the latter's President refused to accept two US military aircraft full of immigrants, citing unfair treatment. The tariffs were rolled back in a few hours once terms were agreed upon.“The market needs to structurally and significantly reprice the trade war risk premium” with the announcements at the weekend roughly three times larger than what was envisaged, George Saravelos, head of FX research at Deutsche Bank, wrote in a note to clients. “For Canada and Mexico, we see this trade shock - if sustained - as being far larger in economic magnitude than that of Brexit on the UK and would expect both countries to enter a recession in coming weeks.”(With Inputs From Agencies.)Continue ReadingFirst Published: Feb 3, 2025 5:02 AMISTLive TVLoading...Check out our in-depth,& get real-timeStock MarketUpdates on CNBC-TV18. Also, Watch our channelsCNBC-TV18,andLive on-the-go!TagsMost ReadCurrencyCommoditiesCurrencyPriceChange%ChangeNewsLive TV