Wall Street futures, dollar drop amid US tariff tumult

SYDNEY – Wall Street futures and the U.S. dollar fell in Asia on Monday, as uncertainty over U.S. tariffs revived the “sell America” trade. Investor confidence in the entire artificial intelligence (AI) sector is also set to be tested this week with results from tech giant Nvidia expected to make waves.

Gold prices gained while oil eased ahead of another round of U.S.-Iran talks in Geneva scheduled for Thursday. The risk of U.S. military action remains if no deal is reached.

Market uncertainty surged after the U.S. Supreme Court struck down former President Donald Trump’s emergency tariffs. Trump later announced a new 10% rate on imports from the rest of the world, only to raise it to 15%, surprising some U.S. officials.

“The tariff landscape is now more uncertain than before. Uncertainty is not good news for any economy or market,” said Rodrigo Catril, senior FX strategist at NAB. “Unless common sense prevails, we could be entering a circular process where new tariffs are announced, then potentially overturned, only for new tariffs to be announced, and we do the dance again.”

It remains unclear when these tariffs will take effect, what might be excluded, or whether all countries will face 15%. Previously, the UK and Australia had 10% rates, while many Asian countries faced higher tariffs.

Asian Markets Mixed Amid Tariff Uncertainty

Asian markets showed mixed results on Monday. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.8% in light trading.

Japan’s Nikkei was closed for a holiday, but futures fell 1.0% to 56,605 from a cash close of 56,825.

South Korea extended its bull run with a 1.2% gain after a 5.5% jump last week to all-time highs, while Taiwan also rose 1.2% to a record peak.

Nvidia Results in Focus

In the U.S., S&P 500 futures dropped 0.7% and Nasdaq futures fell 0.9% ahead of Nvidia’s earnings report. The tech powerhouse, which makes up almost 8% of the S&P 500, is expected to post a 71% increase in earnings per share to $7.76, though estimates range from $6.28 to $9.68. Analysts expect the stock could move at least 6% in either direction following the announcement.

Treasury Market and Economic Data

Treasury markets were affected by tariff developments, as potential changes could force the U.S. government to repay roughly $170 billion in revenue. This could widen the fiscal deficit to about 6.6% of GDP.

Mixed U.S. economic data added to the uncertainty, with growth underperforming forecasts in the December quarter but core inflation surprising on the high side. Expectations for a June Federal Reserve rate cut fell to around 52%, down from over 60% a week ago, while the dollar strengthened earlier in the week.

On Monday, the dollar came under pressure amid speculation that tariff chaos could undermine confidence in U.S. assets. The dollar fell 0.6% against the Japanese yen to 154.06, while the euro rose 0.4% to $1.1826. The Swiss franc also strengthened as the dollar slid 0.6% to 0.7716. Bitcoin dropped 4.6% to $64,478.

Commodities React

Gold rose 1.0% to $5,156 an ounce as investors sought safe-haven assets. Silver gained 3.2% to $87.25 per ounce after a near 8% jump on Friday.

Oil prices remained volatile after last week’s gains following Trump’s warning of potential military action in Iran. Brent crude fell 1.1% to $70.94 per barrel, while U.S. crude dropped 1.2% to $65.71 per barrel.

-Reporting by Wayne Cole; Editing by Lincoln Feast/Reuters