This morning, U.S. equity futures took a nosedive as traders grappled with the latest salvo in President Donald Trump's tariff skirmish with Canada, Mexico, and China. The Dow Jones Industrial Average futures slipped by 0.3%, S&P 500 futures dipped 0.6%, and Nasdaq futures tumbled 0.7%. These tariffs, effective immediately, slap a 25% duty on imports from Canada and Mexico, while Chinese goods face a hike from 10% to 20%.China retaliated with tariffs of 10%-15% on select U.S. imports, and Canada is expected to follow suit. The specter of a global trade war looms large, threatening to upend nearly $2.2 trillion in annual trade among these nations. This uncertainty triggered a selloff on Wall Street, with the S&P 500 suffering its steepest one-day drop since mid-December, and the Nasdaq closing about 9% below its all-time high. The Russell 2000, reportedly Trump's favored index, plunged 2.8%, marking a nearly 15% decline since its peak on November 25. It's now trading below its level at the time of Trump's election.

In the wake of the tariff turmoil, oil prices slipped, Bitcoin took a hit, and gold prices climbed as investors flocked to safe-haven assets amid the market turbulence. Investors are keenly eyeing upcoming economic data, including the ADP Employment report, Challenger Job Cut report, and February's nonfarm payroll data, all due later this week. Federal Reserve Bank of New York President John Williams is set to speak, and market watchers will scrutinize his remarks for clues on the central bank's monetary policy direction. In the corporate arena, several companies made notable pre-market moves. Okta's shares soared 16% after the company upped its fiscal 2026 revenue forecast and delivered better-than-expected fourth-quarter results. Walgreens Boots Alliance climbed 6.7% amid whispers of a potential $10 billion go-private deal with Sycamore Partners. Meanwhile, CoreWeave announced its intention to go public, filing a registration statement with the SEC for an initial public offering. The company plans to list its class A common stock on Nasdaq, though the number of shares and pricing details remain under wraps.

Investors are increasingly skeptical that the White House's policies will lead to stable economic growth. Consumer and business confidence has taken a hit. Trump's second term began with a stick, unlike his first, which started with a carrot—tax cuts and deregulation. Now, he's clashing with trading partners and shaking up the federal administration. It's a risky strategy if the anticipated benefits don't materialize quickly. This sentiment is echoed by market observers like Tiffany Wilding of Pimco, as noted by Robert Armstrong in the Financial Times.

Europe, on the other hand, didn't face the same market collapse. They've been buoyed by a surge in defense stocks, as the U.S. appears to be stepping back from defending Europe. BAE Systems rose 14.6% in the UK, and in France, Thales jumped 16%, while Rheinmetall climbed 14% in Germany. However, the picture is different today, with investors assessing the consequences of tariffs. The Stoxx Europe 600 is currently down 1.7%.

Europe's rise was in stark contrast to the U.S., leaving the future uncertain. In tandem with the tariffs, the White House has halted support for Ukraine, aiming to pressure President Volodymyr Zelensky after his recent bold statements. This move is seen as a prerequisite for the U.S. to regain influence in negotiations with Russia. Trump and JD Vance have hinted that a minerals and rare earths agreement remains possible, fostering economic ties between Washington and Kiev in the absence of a protection pact.

Elsewhere, oil prices are under pressure as OPEC+ announced plans to increase production in April, a surprising move after previous delays to keep prices high. Trump also took a swipe at Japan, accusing it of keeping the yen artificially low, a criticism also directed at China regarding the yuan. Trump will address Congress tonight, offering a more formal platform than his usual Truth Social posts.

In Asia, markets are down. Japan fell 1.1%, Australia dropped 0.6% and Taiwan 1.2%. South Korea, which was closed yesterday, is down 0.2%. India is also losing ground. Chinese markets are slightly bearish, with the Hang Seng dropping 0.3%. The VIX index flirting with 23 points, its highest since mid-December 2024.

Today's economic highlights:

On today's agenda: the unemployment rate in Japan and the eurozone. See the full calendar here.

  • Dollar index: $106.0
  • Gold: $2,924
  • Crude Oil (BRENT): $70.52 WTI:$67.52
  • Rate United States 10 years: 4.13%
  • BITCOIN: US$83,100

In corporate news:

  • Tesla faces a decline in China-made EV sales and scrutiny over a potential $400 million armored Cybertruck deal.
  • Goldman Sachs partners with Saudi Arabia's PIF for Gulf-focused funds and removes 'diversity and inclusion' from its annual filing due to U.S. law changes.
  • Target surpasses Q4 2024 earnings expectations but forecasts flat sales for 2025, citing potential price increases due to US tariffs.
  • Kroger CEO Rodney McMullen resigns amid an internal investigation into inappropriate conduct.
  • Ford Motor recalls 35,328 vehicles in the U.S. due to a fire risk from faulty LED lights.
  • CoreWeave Inc. files for an IPO with a valuation target of over $35 billion, following a revenue surge.
  • American Airlines appeals to the U.S. Supreme Court over a ruling that its partnership with JetBlue violates antitrust laws.
  • Citigroup nearly transferred $6 billion to the wrong account due to a copy-paste error.
  • Honeywell International acquires Sundyne for approximately $2.16 billion to $2.2 billion.
  • TSMC announces a $100 billion investment to build five additional chip factories in the US, creating up to 25,000 jobs.

Analyst Recommendations:

  • Agree Realty Corporation: Barclays upgrades to equalweight from underweight with a target price raised from USD 74 to USD 75.
  • Charles River Laboratories International, Inc.: Citi upgrades to neutral from sell with a price target raised from USD 155 to USD 175.
  • Cnh Industrial N.v.: AlphaValue/Baader Europe upgrades to buy from add with a price target raised from USD 16.20 to USD 16.40.
  • Labcorp Holdings Inc.: Citi upgrades to buy from neutral with a price target raised from USD 250 to USD 300.
  • Medtronic Plc: Citi upgrades to buy from neutral with a price target raised from USD 92 to USD 107.
  • Nordson Corporation: KeyBanc Capital Markets upgrades to overweight from sector weight with a target price of USD 260.
  • Okta, Inc.: Mizuho Securities upgrades to outperform from neutral with a price target raised from USD 110 to USD 127.
  • The Scotts Miracle-Gro Company: Stifel downgrades to buy from hold and reduces the target price from USD 78 to USD 70.
  • Edison International: Goldman Sachs maintains its neutral recommendation with a price target reduced from USD 88 to USD 68.
  • Illumina, Inc.: Citigroup remains neutral recommendation with a price target reduced from USD 130 to USD 90.
  • Noble Corporation Plc: Sparebank 1 Markets maintains its buy recommendation and reduces the target price from 42 to USD 33.
  • Transocean Ltd.: Sparebank 1 Markets maintains its buy recommendation and reduces the target price from USD 5.50 to USD 4.
  • Unity Software Inc.: CITIC Securities Co Ltd maintains its buy recommendation with a price target raised from USD 23 to USD 31.