TLDR
- The S&P 500 fell 0.3% and the Nasdaq dropped 0.8% on Monday, while the Dow edged up 0.3%
- New US tariffs on Canada triggered a breakdown in trade talks, with retaliatory tariffs threatened
- Trump threatened 50% tariffs on Canadian autos, auto parts, and steel starting January 2027
- Semiconductor stocks fell ahead of Nvidia’s earnings report due Wednesday
- The US is also preparing new economic sanctions against Iran, with details expected Monday
US stocks mostly fell Monday as investors dealt with a fresh wave of trade tensions, new sanctions against Iran, and a big week ahead for tech earnings.
The S&P 500 dropped 0.3% and the Nasdaq Composite fell 0.8%. The Dow Jones Industrial Average was the only major index to rise, gaining 0.3%.
Trade War With Canada Heats Up
US-Canada trade talks broke down over the weekend after the US imposed new tariffs on Canadian goods. Canadian Prime Minister Mark Carney suspended negotiations and promised to hit back with matching tariffs.
BREAKING: President Trump says tariffs on all cars, trucks, automotive parts, and steel from Canada will be increased to 50% effective January 1st.
"Canada will be treated like a state no longer," Trump says. pic.twitter.com/c8zbtMJzm2
— The Kobeissi Letter (@KobeissiLetter) August 24, 2026
President Trump then threatened to raise tariffs on Canadian autos, auto parts, and steel to 50%, starting January 1, 2027. Shares of General Motors and Ford both moved lower on the news.
The auto tariff threat added to an already uneasy mood in markets. Investors were already cautious heading into a week packed with major events.
Tech and chip stocks took the brunt of Monday’s selling. Sandisk and Micron fell after reports that Apple is testing chips made by China’s CXMT.
Alibaba also announced a $10.2 billion share sale to fund its artificial intelligence push, adding pressure to the semiconductor sector.
Iran Sanctions Add to Market Pressure
The US is preparing a new round of economic sanctions against Iran. Treasury Secretary Scott Bessent is expected to give more detail Monday afternoon.
Bessent described the measures in a Financial Times op-ed as the largest financial offensive ever launched against an adversary. Markets were watching closely for specifics.
The 10-year Treasury yield dipped to 4.72%. The 30-year yield fell to 5.24%.
Nvidia Earnings in Focus
All eyes are now on Nvidia, which reports earnings Wednesday. The company has become a symbol of the AI trade, and its results are expected to set the tone for the broader market.
The iShares Semiconductor ETF was down again Monday. The index had surged into a new bull market earlier this month but faced more selling pressure over the past week.
Chris Larkin, managing director at E*TRADE from Morgan Stanley, said Nvidia and other tech earnings are “positioned to be a major weight on the market’s momentum scale.”
Federal Reserve Chairman Kevin Warsh is also scheduled to speak Friday at the Jackson Hole summit. Bond traders will be watching his comments closely for signals on interest rate policy.
The combination of tariff news, Iran sanctions, and the Nvidia earnings report makes this one of the busier weeks of the year for market watchers.
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