Financial markets were jolted again Sunday night as former U.S. President Donald Trump threatened to reimpose sweeping tariffs on up to 12 countries, with rates reaching as high as 70%—potentially starting August 1. U.S. stock index futures, which had been hovering near all-time highs, pulled back sharply, signaling another round of uncertainty just days ahead of the July 9 “Liberation Day” tariff deadline.

Futures Retreat Amid Renewed Trade Fears

• Dow Jones Futures: down 0.5%

• S&P 500 Futures: down 0.6%

• Nasdaq Futures: down 0.4%

This pullback comes after weeks of strong equity performance, with the S&P 500 and Nasdaq Composite recently notching new record highs, driven by tech stocks and optimism about a soft landing for the U.S. economy.

However, Trump’s statement that he intends to issue “tariff notices to 12 trading partners” has created fresh anxiety across risk assets. Among the countries reportedly in the crosshairs: China, Germany, Japan, Mexico, and Vietnam.

Tesla Slips, Chinese Rivals Rise

Tesla Inc. shares traded lower in early pre-market movement after CEO Elon Musk made headlines over the weekend for announcing plans to form a new U.S. political party. While the announcement lacked policy specifics, it created enough ambiguity to shake investor confidence, especially as Tesla faces increased competition from Chinese EV manufacturers, such as BYD and NIO, which are expanding aggressively into European and Latin American markets.

Meanwhile, shares of Chinese EV makers listed in Hong Kong and New York showed early gains on Monday, as investors interpreted potential tariff barriers as an opportunity for regional market expansion.

What’s Driving Market Anxiety

Markets had been largely optimistic that the July 9 tariff deadline—part of a 90-day pause negotiated earlier in 2025—would be extended or softened. However, the tone shift in Trump’s latest remarks, delivered during a campaign rally in Texas, has sparked fresh concern that unilateral trade actions may be imminent.

Key investor concerns include:

• Disruption of global supply chains, especially in tech and autos

• Potential retaliatory tariffs from major trading partners

• Repricing of inflation risks due to higher import costs

• Slower corporate earnings in Q3 if tariffs are implemented

Broader Market Impact

• Commodities: Copper fell 1.6%, oil dropped 1.3% as growth sentiment soured

• Currency Markets: U.S. dollar weakened slightly, gold held firm at $3,350/oz

• Bond Yields: Slight uptick in U.S. 10-year yield as risk sentiment turned cautious

• Volatility Index (VIX): Ticked higher after weeks of decline, indicating investor hedging

What to Watch Next

• July 9 tariff deadline: Any confirmation—or denial—of new tariffs will set the tone for the rest of July

• Inflation data (July 11): Will shape expectations for Fed policy moves

• Q2 earnings season (starts July 15): Trade-sensitive sectors like autos, retail, and tech will be closely scrutinized

Conclusion

Markets are once again at the mercy of trade policy uncertainty. Trump’s aggressive tariff stance may be a political strategy—but its impact on investor psychology is real. For now, the rally in stocks has paused, and the next 72 hours will be critical in determining whether this is a temporary dip or the beginning of a broader risk-off move.

ForexFlash will continue to monitor global equity movements, tariff developments, and sector-level shocks driven by trade tensions.