Stock Market Today: Stocks tumble as Trump tariffs spark trade war fears todayheadline

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U.S. equity futures tumbled in early Monday trading, while energy prices leaped and the dollar soared to a two-year high against its currency peers as markets reacted to the weekend tariff announcements of President Donald Trump and their potential to trigger a global trade war. 

Trump, as promised, unveiled plans to impose a 25% levy on goods imported from Canada an Mexico, which operate within a trade agreement he renegotiated in 2019, starting on Feb. 4 with a smaller 10% tariff placed on crude and energy products from north of the border. 

A similar 10% duty was placed goods from China, with the EU “definitely” facing levies over the coming weeks as part of his powers under the International Emergency Economic Powers Act. Collectively, the tariffs would cover around half of all U.S. imports.

“We may have short term some little pain, and people understand that. But long term, the United States has been ripped off by virtually every country in the world,” Trump told reporters in Washington. 

The U.S. dollar index, which tracks the greenback against a basket of six global currency peers, surged to a two year high in overnight trading and was last marked % higher at 109.506 as investors snapped-up defensive assets amid worries over a global trade war.

China has said it will take “appropriate measures” on U.S. goods in retaliation, and planned a legal challenge through the World Trade Organization, while Canada has outlined its tariff response and Mexico is preparing to do the same. 

“If Mexico, Canada and China push through with the announced retaliation, the global economy would see an unprecedented escalation of trade tensions,” said ING’s senior economist for global trade Inga Fechner. “Over the longer run. Economically speaking, escalating trade tensions are a lose-lose situation for all countries involved.”

Related: Inflation report upends Fed interest rate cut bets in 2025

Oil prices were also on the move, with WTI crude future rising by $1.86 to $74.40 per barrel amid the disruption linked to north America’s closely-integrated energy markets.

On Wall Street, stocks are braced for heavy opening-bell declines with the S&P 500 called 85 points lower and the Dow Jones Industrial Average looking at a 550 point pullback from Friday’s close.

The tech-focused Nasdaq, meanwhile, is called 344 points lower with declines across the board including Nvidia  (NVDA) , Tesla  (TSLA) , Apple  (AAPL)  and Alphabet  (GOOGL) .

The market’s benchmark volatility gauge, the CBOE Group’s VIX index, surged to the highest level in more than six weeks and was last marked 25.4% higher at $19.87.

The suggests traders are expecting daily swings of 1.24%, or 75 points, for the S&P 500 over the next month. 

More Economic Analysis:

• Major fund manager reveals stock market forecast for 2025
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• Jobs report has big implications for Fed rate bets, Treasury yields

Markets saw similar reactions overseas, with Europe’s Stoxx 600 falling 1.43% in Frankfurt and Britain’s FTSE 100 down 1.25% in London amid the uncertainty tied to Trump’s next tariff target. 

Overnight in Asia, Japan’s Nikkei 225 fell 2.66% in Tokyo, while the regional MSCI ex-Japan benchmark was marked 2.16% lower heading into the final hours of trading. 

Related: Veteran fund manager issues dire S&P 500 warning for 2025