Stock Futures Could Reflect Unease With Trump’s Tariff Fight With Canada

Gas and oil prices are both up again. (Brandon Bell/Getty Images)

Key Points

• The U.S. imposed a 50% tariff on about $20 billion of Canadian imports after trade talks broke down late Friday.
• Canadian Prime Minister Mark Carney promised to match the tariff dollar for dollar starting Sept. 8.
• Minneapolis Fed President Neel Kashkari said the U.S. war with Iran is driving up energy prices and inflation.

Stock futures begin trading Sunday night, and they could reflect Wall Street’s unease with the latest U.S.-Canada trade dispute.

The U.S. imposed a 50% tariff on about $20 billion worth of Canadian imports after talks between the countries broke down late Friday night. The levy officially went into effect at 12:01 a.m. Saturday.

The goods range from dairy products and hard liquors to plywood and hockey sticks to clothing and textiles.

Canadian Prime Minister Mark Carney called the tariff an “attack” and “a miscalculation” and promised to match the tariff “dollar for dollar” to protect his country’s workers, farmers, families, and businesses. The Canadian tariff will take effect Sept. 8.

Late Saturday, President Donald Trump posted on social media that “Canada wants the benefits of being a State, without being one!!!”

On another continent, the U.S. is fighting a very different kind of war—a hot one with Iran. A key issue is control of the Strait of Hormuz, a critical passageway for oil and other global supplies.

Minneapolis Fed President Neel Kashkari told CBS News’ Face the Nation that theIran war is driving up prices, especially energy prices.

“The longer it [the war] goes on, the bigger effect it ends up having on the U.S. economy and on inflation,” he said.

“I’m not feeling confident right now that inflation is heading back down to [the Fed’s 2% annual] target in a short period of time,” Kashkari added.

Inflation for July stood at 3.4%, according to the consumer price index.

Front Month Brent crude for October delivery gained 6.63% last week, to $94.39 a barrel—its largest one-week percentage gain since the week ending July 24. West Texas Intermediate crude contract for September delivery declined 0.5%, settling at $86.64 a barrel.

The average price of unleaded gasoline was $4.099 a gallon on Sunday, up from $4.091 a gallon last month and $3.150 a year ago, according to AAA.

The Dow Jones Industrial Average ended the week down 455 points at 53277.91, or 0.85%—its largest one-week point and percentage declines since July 17, according to Dow Jones Market Data. The index is up 1.5% this month and 10.9% this year.

The S&P 500 ended last week down 1.4%, at 7674.37, snapping a three-week winning streak and posting its largest one-week point and percentage declines since July 17.

The S&P 500 is up 2.5% this month and 12.1% this year.

The tech-heavy Nasdaq Composite snapped a three-week winning streak, ending the week down 2.1%, at 26180.45. It was the index’s largest one-week percentage decline since July 24.

The Nasdaq is up 3.2% this month and 12.6% so far this year.

Write to Janet H. Cho at janet.cho@dowjones.com

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