Markets are also watching for volatility from a potential U.S. action in Iran and the Federal Reserve’s first policy meeting for the year later this week.
- Over the weekend, U.S. President Donald Trump threatened to impose 100% tariffs on Canadian goods, prompting Canadian PM Mark Carney to urge citizens to buy local goods.
- The escalation with Canada comes as Trump pushed ahead for a takeover of Greenland, and potential actions in Cuba and Iran.
- Top U.S. companies, including Apple and Tesla, will report quarterly earnings this week; the central bank will conduct its first policy review, though no interest rate change is expected.
U.S. stock futures dipped late Sunday as traders penciled in volatility from geopolitical risks associated with the U.S.’s moves in Greenland and Iran – and a new tariff threat to Canada – ahead of a heavy corporate earnings week.
As of 9:20 pm ET, the S&P 500 futures declined 0.23%, while the Nasdaq 100 futures were down 0.18% and the Dow futures slid 0.09%.
On Stocktwits, retail sentiment toward the SPDR S&P 500 ETF Trust (SPY) was ‘extremely bearish’ amid ‘high’ message volume. Sentiment toward the Invesco QQQ Trust (QQQ) was also ‘bearish’ amid ‘high’ message volume, while sentiment toward the SPDR Dow Jones Industrial Average ETF Trust (DIA) was ‘bullish’ amid ‘high’ message volume.
What’s Weighing On Markets?
Over the weekend, U.S. President Donald Trump threatened to impose 100% tariffs on goods imported from Canada if they went ahead with their trade deal with China. In a Truth Social post, Trump attacked Canadian Prime Minister Mark Carney and said that if he "thinks he is going to make Canada a 'Drop Off Port’ for China to send goods and products into the United States, he is sorely mistaken."
It is unclear what deal Trump is referring to; Last week, Canada announced a "strategic partnership" with China and agreed to reduce tariffs. The U.S. president also withdrew an invitation for the Canadian premier to join his new “Board of Peace”.
In response, Carney urged Canadian citizens to back domestic businesses and workers under a new “Buy Canadian” policy. “Canadians have made a choice: to focus on what we can control,” he said in an X video post. Speaking to the press later, Carney clarified that his government had “no intention” of pursuing a free trade deal with China. Canada is one of the U.S.’s top three trading partners.
Meanwhile, gold hit another record, rising to $5,000 per ounce for the first time, while silver broke the $100/oz barrier, and oil prices stabilized after a Friday relief rally as investors absorbed a spate of global news.
Although the U.S. announced last week that a framework for Greenland had been reached, markets are closely watching Trump’s potential actions in Cuba and in protest-hit Iran. Brent crude futures rose 12% to $66 a barrel, while the U.S. West Texas Intermediate crude was up 14% at $61.21 a barrel, according to Reuters, as investors weighed the resumption of operations at a key Black Sea export terminal against the risks posed by the evolving political situation in Iran.
On the corporate front, more than 90 S&P 500 companies are set to report this week, including Tesla, Apple, Meta Platforms, and Microsoft.
Trending Stocks To Watch
ImmunityBio (IBRX): The biotech stock was drawing heavy chatter amid impressive data in an ongoing trial for a glioblastoma treatment and a recent Saudi approval for lung cancer.
Brand Engagement Network (BNAI): Investors are watching the micro-cap stock, after it gained 90% on Friday following licensing and investment news last week.
Intel (INTC): Investors are watching Intel stock after it dropped 17% on Friday after mixed results from the chipmaker. Analysts' commentary is pouring in.
Precious metals: SPDR Gold Shares ETF (GLD) and iShares Silver Trust (SLV) are trending high up on Stocktwits, tracking the price rally for their underlying commodities.
Broader Markets
While focus remains on the corporate earnings, the Federal Reserve’s monetary policy review announcement on Wednesday would drive markets. Traders largely expect no change in interest rates; however, any update on Jerome Powell’s future as Fed chair could be a curveball.
Meanwhile, Congress faces a Friday deadline to once again fund the government or risk a shutdown similar to the six-week lockdown in October-November.
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