Stock futures fell Monday as the U.S. announced that new tariffs are set to go into effect on August 1, delaying the initially expected date of July 9. President Donald Trump and Commerce Secretary Howard Lutnick clarified the tariff schedule in a discussion with reporters on Sunday. Lutnick stated, “Tariffs go into effect August 1.
But the president is setting the rates and the deals right now.” Trump nodded in agreement. Treasury Secretary Scott Bessent also mentioned on CNN’s “State of the Union” that tariffs will revert to April 2 levels on August 1 unless there’s progress on trade deals with the U.S.
Investors, who had anticipated the tariffs to take effect this week, were caught off guard. Trump’s initial 90-day reprieve on the reciprocal tariffs for most U.S. trading partners is set to end Tuesday.
Adding to the trade uncertainties, Trump threatened an additional 10% tariff on countries aligning with BRICS (Brazil, Russia, India, China, and South Africa). The group, which recently met in Rio de Janeiro, has been trying to reduce its dependence on the U.S. dollar. Trump’s announcement came after BRICS voiced concerns about unilateral tariffs and non-tariff measures.
Despite the trade tensions, U.S. markets have been buoyant, with the S&P 500 and Nasdaq Composite closing at all-time highs last Friday, partly due to confidence that severe tariffs announced in April would not be implemented.
New tariffs delay impacts markets
However, some investors worry that the market’s current highs could lead to increased volatility if trade negotiations result in higher-than-expected tariffs.
Others remain hopeful that companies will navigate these challenges successfully in the upcoming earnings season. Tom Lee, head of research at Fundstrat Global Advisors, noted on “Closing Bell” that while tariffs have reshaped economic flows, the potential benefits could lead to positive earnings surprises. Tesla’s shares fell more than 6% after CEO Elon Musk announced plans to launch his own political party.
Musk stated that the party would focus on a small number of Senate and House seats, aiming to sway contentious legislative votes. Tesla investors have expressed concern about Musk’s political involvement and its potential impact on the company’s performance. The European market opened mixed on Monday, with no clear trend among regional sectors.
London’s index fell 0.1%, while France’s remained little changed, and Germany’s rose by 0.4%. U.S. stock futures opened lower on Sunday. Dow Jones Industrial Average futures dropped by 110 points, or 0.3%, while S&P 500 and Nasdaq 100 futures each dipped 0.3%.
As the week progresses, investors will be closely monitoring any developments related to trade negotiations and the potential impact of new tariffs.
