Stock futures saw some downward pressure on Monday evening after President Donald Trump indicated he was considering imposing tariffs on Canada and Mexico. Futures tied to the S&P 500 were slightly lower, while Nasdaq 100 futures dropped by 0.1%, and Dow Jones Industrial Average futures remained flat.
The market had initially shown positive movement during a shortened trading session earlier in the day, as Trump was sworn in as the 47th President of the United States. Futures continued to climb in the early evening, but sentiment turned negative after Trump’s comments at the White House. While signing executive orders, Trump mentioned he was contemplating a 25% tariff on Mexico and Canada, set for February 1, citing their border policies. He also referred to China in the conversation but did not announce any concrete plans for tariffs on the country. The president suggested tariffs could be imposed on China if the nation fails to approve a TikTok deal.
While Trump’s hesitation to impose blanket tariffs was seen as somewhat reassuring to investors, his remarks about potential tariffs on Mexico and Canada were a disappointment to traders who had hoped for a delay in such measures. Earlier reports had indicated that Trump’s initial executive actions would not include immediate tariffs, which had helped fuel market optimism.
Robert Sockin, Senior Global Economist at Citi, commented on the uncertainty surrounding Trump’s policies, stating, “Asset prices in 2025 will be significantly driven by the path of Trump’s policies. Uncertainty is likely to persist and be a feature of Trump’s presidency.” Sockin also noted that investors who maintain agility and stay focused on strong economic fundamentals could see positive returns despite the ambiguity surrounding the administration’s next moves.
In other developments, Trump declared a national energy emergency aimed at boosting fossil fuel production. In his inaugural address, the president positioned his return to the White House as the start of a new era of growth, while criticizing the Biden Administration’s policies.
Wall Street will closely monitor how Trump’s pro-business agenda unfolds in the coming months, particularly with regard to deregulation and policies that may impact sectors like banking, small-cap stocks, oil, and cryptocurrency. The stock market is coming off its best week since Trump’s election victory, with the S&P 500 gaining 2.9%, its strongest weekly performance since November. The Dow climbed 3.7%, and the Nasdaq Composite rose by 2.5%.
As Trump’s presidency progresses, investors will be paying close attention to how his economic and trade policies develop, with potential volatility tied to his unpredictable approach to governance.
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