On Tuesday, the US benchmark equity indexes experienced a notable decline, primarily driven by retaliatory measures from Canada and China against trade tariffs imposed by the Trump administration. The recently announced tariffs of 25% on imports from Canada and Mexico took effect on the same day, while the US government raised its tariffs on Chinese imports to an unprecedented 20%.
In response, both China and Canada have enacted their own tariffs on US goods. China has imposed new tariffs of 15% on a range of products, including chicken, wheat, corn, and cotton, alongside a 10% tax on several other items, as reported by various media sources. Meanwhile, Canada has committed to implementing a 25% tariff on approximately CA$30 billion (equivalent to $20.65 billion) worth of US goods immediately, with plans for an additional CA$125 billion worth of tariffs to follow in three weeks. Compounding these trade tensions, sentiment in the markets appears to be shifting as reflected in the RealClearMarkets sentiment index, which serves as a barometer for consumer sentiment.
The index fell to 49.8 in March from 52.0 in February, indicating a rise in market pessimism, marked by declines across all three components of the index and increasing financial stress. Any reading below 50 is interpreted as a signal of more pessimism taking hold compared to optimism. In the commodities sector, West Texas Intermediate crude oil saw a slight increase, closing up $0.04 to settle at $68.42 per barrel.
In contrast, May Brent crude, which acts as the global benchmark, was last traded down $0.42 at $71.20. In corporate news, Walgreens Boots Alliance ($WBA) is reportedly on the verge of finalizing a deal with private-equity investors Sycamore Partners to take the company private, with the deal valued at around $10 billion.
Following the announcement, Walgreens shares surged by 5.6%. Conversely, Best Buy ($BBY) has raised concerns over potential price hikes due to tariff-related uncertainties while also providing its full-year earnings forecast, which has come short of Wall Street estimates. This has resulted in a significant slump in the retailer’s shares, down by 13%..