Canada's TSX stock index futures fall due to US tariff uncertainty

Investing.com - Monday, futures linked to major Canadian stock indices edged lower as investors grappled with uncertainty surrounding U.S. trade policies.

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As of 06:16 AM Eastern Time (19:16 Beijing Time), the S&P/TSX 60 index standard futures contract declined by 2 points, a 0.1% decrease.

Last Friday, the S&P/TSX Composite Index rose 0.7% to 33,817.51 points, surpassing the previous trading day’s record high close. The index gained a total of 2.25% over the week.

Market sentiment was boosted by a Supreme Court ruling that declared President Trump’s use of emergency economic powers to impose broad tariffs illegal. Financial stocks and metals and mining stocks, which constitute significant portions of the TSX index, both rose.

Canada is an important trading partner of the U.S., with about 70% of its exports going to the U.S., but the future of this relationship has been uncertain due to criticisms from Trump during his second term in office.

U.S. Stock Index Futures Decline

U.S. stock index futures fell as investors digested the Supreme Court’s unfavorable ruling on Trump’s emergency tariffs, while awaiting key earnings from chip giant Nvidia this week.

As of 06:32 AM Eastern Time, Dow futures dropped 122 points, a 0.3% decline; S&P 500 futures fell 17 points, also down 0.3%; Nasdaq 100 futures declined 101 points, a 0.4% decrease.

Major Wall Street indices closed higher last week, driven by the highly anticipated Supreme Court decision, which improved market sentiment, and some relief that the U.S. did not launch military strikes against Iran.

Trump Raises Tariffs to 15% After Supreme Court Ruling

Over the weekend, Trump announced he would raise the temporary general tariffs from the initial 10% to 15%, after the Supreme Court ruled that his declaration of a national emergency to impose a series of trade tariffs exceeded his authority.

The U.S. president called the ruling a “disgrace” and immediately invoked a provision of the 1974 Trade Act to set a 15% global tariff, lasting up to 150 days, to quickly address “international payment issues.”

Lale Akoner, a global market analyst at eToro, said: “While the Supreme Court’s rejection of Trump’s use of IEEPA for tariffs closes a legal avenue, it does not mean the end of the tariff system. We believe the market has already priced in a restructuring of trade policies, especially the removal of IEEPA tariffs and a move toward a more formalized 15% framework. This ruling accelerates that shift rather than derails it.”

“Recent risks involve uncertainty: a legal shift could temporarily suppress market activity. However, if the outcome is a more predictable tariff structure, stocks could ultimately benefit.”

Reports indicate that several major countries that signed trade agreements with the Trump administration over the past year are now seeking renegotiation or clearer explanations of their tariff policies.

The European Commission, the EU’s executive body and chief negotiator for the 27 member states, has demanded that the U.S. comply with the terms of the agreement reached in 2025. The Commission also called on Washington to provide a “full clarification” on how its tariff policies will change following the Supreme Court’s decision.

In this context, investors will closely watch Federal Reserve Governor Christopher Waller’s speech on Monday.

Waller will deliver a speech on the economic outlook in Washington. He was one of two policymakers who voted against maintaining the Fed’s interest rate at 3.5% to 3.75% in January.

Data on durable goods orders and factory orders will be released later today.

Nvidia Earnings in Focus

Additionally, this week’s focus is on the earnings report from AI giant Nvidia, seeking more clues about this rapidly growing industry. The company produces some of the most advanced AI processors on the market, making it a key indicator of AI-related demand.

Nvidia will release its Q4 earnings on Wednesday. According to Investing.com forecasts, the world’s most valuable publicly traded company is expected to report earnings of $1.52 per share and revenue of $65.56 billion.

In comparison, the same period last year saw earnings of $0.89 per share and revenue of $39.33 billion.

As Nvidia reports earnings, the outlook for the AI industry and its potential impact on the tech sector are becoming increasingly uncertain. In recent weeks, software and logistics stocks have been heavily sold off due to concerns over AI-related disruptions, with losses spreading to broader sectors.

Oil Prices Retreat After Gains

Oil prices fell on Monday, retracing some of last week’s gains, as investors weighed the prospects of a third round of nuclear talks between Iran and the U.S. and new uncertainties stemming from U.S. trade policies.

Brent crude futures declined 0.2% to $71.16 per barrel, while U.S. WTI crude futures also fell 0.2% to $66.35 per barrel.

Both contracts surged nearly 6% last week amid fears of conflict between Iran and the U.S. and an unexpected drop in U.S. crude inventories.

The two countries are now expected to hold their third round of nuclear negotiations in Geneva on Thursday, raising hopes for a diplomatic resolution and reducing the risk of Middle Eastern oil supply disruptions.

Iran is a major oil producer within OPEC, holding the world’s largest proven crude oil reserves.

Gold Rises

Gold prices rose for the fourth consecutive trading day, extending last week’s gains, as Trump’s new global tariffs and a weakening dollar boosted safe-haven demand.

As of 04:45 AM Eastern Time (17:45 Beijing Time), spot gold increased 0.9% to $5,151.77 per ounce, and U.S. gold futures rose 1.8% to $5,173.01 per ounce.

Last week, gold rose over 1% amid geopolitical tensions between the U.S. and Iran that fueled safe-haven buying.

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