Global financial markets were jolted Monday as investors reacted to renewed turmoil surrounding U.S. trade policy. A sharp escalation in tariffs by President Donald Trump, following a Supreme Court ruling that struck down earlier emergency measures, reignited uncertainty across currencies, equities, and commodities. In Asia, traders revived a blunt refrain — “Sell America” — unloading dollars and trimming exposure to Wall Street futures as volatility accelerated. Market participants noted that sudden policy shifts could have ripple effects across global supply chains and investor sentiment, potentially affecting corporate strategies worldwide.
The upheaval began after the Supreme Court of the United States invalidated Trump’s tariff framework introduced nearly a year ago, ruling it inconsistent with existing trade law. Markets initially interpreted the decision as a potential de-escalation of trade tensions that had weighed on global growth. That relief proved fleeting. Within hours, Trump announced a sweeping 10% tariff on imports from every country, effective Tuesday. Less than a day later, he raised the rate to 15% via social media, surprising investors and, reportedly, senior officials within his administration.
The legislative authority now being used — invoked for the first time — bars discrimination among trading partners. All nations therefore face the same 15% duty, including Russia and North Korea, previously excluded despite heavy sanctions. Some allies such as the United Kingdom and Australia may encounter higher effective tariffs, while China could see a relative easing compared with earlier targeted measures. India has suspended its trade agreement with Washington, and the European Commission has signaled no immediate policy changes pending legal clarity.
The tariff power lasts 150 days unless Congress votes to extend it, a politically delicate prospect given polls showing tariffs remain unpopular among American voters. The White House maintains that effective rates will not shift dramatically and insists previously negotiated trade deals remain intact. Legal analysts question how agreements tied to now-invalid tariffs can survive further court scrutiny. Treasury Secretary Scott Bessent warned that trading partners failing to respect prior commitments could face embargo measures, adding diplomatic strain. Another complication looms: efforts to reclaim roughly $170 billion in tariffs deemed unlawful. More than 1,800 cases have reportedly been filed with the U.S. Court of International Trade. Economists note that reimbursements would likely flow to importing firms rather than consumers, who absorbed higher costs through price increases.
The prospect of retroactive refunds adds uncertainty to corporate balance sheets and federal revenue forecasts. Wall Street futures slid, pointing to a weaker opening after Friday’s rally. Contracts on the S&P 500 fell 0.8%, while Nasdaq futures dropped about 1%, reflecting caution toward technology shares. Investors are also bracing for earnings from Nvidia, due Wednesday, a key test for the artificial intelligence rally that has powered U.S. equities over the past two years.
The chipmaker is expected to post a 71% jump in quarterly earnings per share on revenue near $66 billion. Analysts forecast average fiscal-year earnings of $7.76 per share, though estimates vary widely. Options markets imply the stock could swing at least 6% in either direction after results. Nvidia’s 1,500% surge from late 2022 to the end of last year has slowed in 2026, reflecting broader caution toward mega-cap technology stocks.
U.S. Treasury markets mirrored the uncertainty. The 10-year yield ended last week at 4.08% after volatile trading driven by mixed growth and inflation signals. Futures edged higher Monday as investors awaited factory-orders data and comments from Federal Reserve Governor Christopher Waller. Bond traders are weighing whether renewed trade barriers will dampen growth or stoke price pressures. Currency markets delivered a clearer verdict. The dollar weakened as traders reduced exposure to U.S. assets. The euro gained 0.4% to $1.1820, sterling rose 0.3% to $1.3516, and the Japanese yen strengthened. The Swiss franc, a traditional haven, advanced 0.5%. Gold emerged as the standout beneficiary of the renewed trade shock. Spot prices climbed more than 1% to about $5,120 per ounce as investors sought safety. Brent crude slipped roughly 1% to near $71 a barrel, pressured by fears that escalating trade friction could weigh on global demand and overall economic growth. Asian equity markets delivered a mixed but generally firmer performance. Hong Kong’s Hang Seng index rose more than 2%, lifted by technology shares and optimism that China and India could benefit from changes to the tariff framework. Economists at Morgan Stanley estimate Asia’s weighted average tariff burden may decline from 20% to 17% under the revised system. Japan’s markets were closed for the Emperor’s Birthday holiday, while mainland China remained shut for Lunar New Year celebrations. European markets, by contrast, appeared poised for losses. Euro Stoxx 50 futures indicated a drop of nearly half a percent at the open. Investors are watching remarks from European Central Bank President Christine Lagarde, who warned that abrupt tariff shifts risk upsetting the fragile economic balance between Brussels and Washington. A senior European Parliament trade official is reportedly considering freezing ratification of the EU-U.S. trade accord in response.
For investors, the dilemma is familiar: navigating abrupt policy reversals in the world’s largest economy. Portfolio managers are hedging currency exposure, rotating into defensive assets, diversifying holdings, and trimming risk.
