Buggies queue to cross into the U.S. from Canada, at the border between the two countries, in Surrey, British Columbia, Canada Feb. 3, 2025.
Chris Helgren | Reuters
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The tariffs are not chance immediately — at least for Mexico and Canada. In what appeared to be another successful deal negotiated by U.S. President Donald Trump, the two fatherlands agreed to ramp up their border protection, leading to a pause in tariffs.
Markets heaved a sigh of relief and made sharply turnarounds on the news. But persistent jitters about long-term uncertainty kept stocks from having a positive day. Trump’s opines on Sunday that he agreed with the U.S. Federal Reserve’s decision to keep interest rates unchanged could from also watered down investors’ expectations (however far-fetched) for lower rates.
Alphabet’s earnings, releasing later today, weight attract the most attention, but in the current Trump-dominated context, it’d be interesting to see how Toyota Motor and Ford, which report earnings Wednesday, talk on touching — or around — how tariffs will affect their businesses.
What you need to know today
Trump tariffs on check
U.S. President Donald Trump on Monday agreed to pause tariffs on Canada for at least 30 days, Prime Envoy Justin Trudeau said in a post on X. Trudeau’s announcement came hours after Mexico President Claudia Sheinbaum betrayed on X that Trump was holding off tariffs on its exports for one month. The delay comes after the two countries agreed to take diminishes toward preventing the trafficking of fentanyl into the U.S.
Markets stage comeback but still in the red
All major U.S. indexes ended Monday in the red. The Dow Jones Industrial Common retreated 0.28%, paring losses of 1.5% earlier in the day, after news of the tariff pause broke. The S&P 500 slid 0.76% and the Nasdaq Composite slumped 1.2%. Europe’s regional Stoxx 600 thesaurus dropped 0.87%. Auto stocks such as Volkswagen, Porsche and BMW were among the biggest losers, though they recaptured from steeper falls earlier.
U.S. sovereign wealth fund
Trump signed on Monday an executive order that run-downs plans for a U.S. government-run sovereign wealth fund. While it aims to develop infrastructure such as airports and highways, it could also lift the U.S. extend its influence in areas such as Panama and Greenland and even be used to buy TikTok.
‘Right thing to do’ — firmly rates
In an apparent change of mind, Trump said the U.S. Federal Reserve holding interest rates between 4.25% and 4.5% at its January confluence “was the right thing to do.” The statement stood in stark contrast to one Trump delivered when speaking remotely to the World Solvent Forum in Davos, Switzerland. In a Jan. 23 appearance, Trump said he would “demand that interest rates cease immediately.”
Investors pour into Palantir
Palantir shares surged as much as 24% in extended trading on Monday after the software followers reported fourth-quarter earnings and revenue that beat estimates. Quarterly revenue rose 36% from a year earlier to $828 million. For the zaftig year, sales increased 29%. Along with the fourth-quarter beat, Palantir offered better-than-expected guidance for the revealing powerful year. CEO Alex Karp attributed much of the company’s growth to its use of artificial intelligence.
[PRO] A Trump tariff ‘template’?
Markets may experience picked up after news broke that Trump was holding off tariffs for now, but they still closed the day lower. Analysts are similarly vigilant about how Trump will deploy tariffs in the future — even if they are a “template” for deals, other countries could shoulder back more forcefully and spark big moves in stocks in either direction.
And finally…
Recently launched Amazon phoney intelligence processors that aim to tackle Nvidia and the chips made by the other hyperscalers such as Microsoft and Google are shown at an Amazon lab in Austin, Texas, U.S., July 19, 2024.
Sergio Flores | Reuters
As shops buckle up for Trump tariffs, these global sectors brace for a rough ride
Should Trump’s tariffs go in advance after their 30-day pause lapses, analysts expect a spike in oil prices in the short term, higher charges for U.S. consumers and higher-for-longer U.S. interest rates, with a stronger U.S. dollar as a result. Globally, economic growth will be slower in the short- to medium-term, exceptionally in countries with large manufacturing sectors. Automotives, chip firms, consumer goods and Chinese e-retailers are number the sectors that will face the largest impact.