A new trade tiff is here, and investors are already feeling the pinch. President Donald Trump on Saturday announced a 25% tariff on goods from Mexico and Canada, and unveiled a 10% levy on Chinese imports. The news sent global stock markets tumbling . S & P 500 futures were last down more than 1.5%. Europe’s Stoxx 600 index slid more than 1% as well, while the Japanese Nikkei 225 dropped 2.7% overnight. The U.S. 10-year Treasury note yield shed about 6 basis points to around 4.51%, a sign that investors are looking for safety and betting on slower U.S. growth. The Japanese yen, another traditional safe haven, also rose 0.3% against the U.S. dollar, to 154.7 yen. “These announcements have come as a shock to many investors who expected tariffs would only be imposed if trade negotiations failed,” wrote David Kostin, chief U.S. equity strategist at Goldman Sachs. “Prediction markets early on Friday priced just a 30% likelihood of a major increase in tariffs during the first-half of 2025. The market-implied probability has now surged to 65%.” Against this backdrop, Goldman compiled a basket of stocks that stand to lose the most under this new tariff regime. Among the stocks that made the list are Canada Goose, Dick’s Sporting Goods , Nike and Ford Motor. Canada Goose and Ford Motor dropped more than 4% each in early trading Monday, while Dick’s and Nike pulled back by 3.8% and 2.4%, respectively. Lowe’s , another stock highlighted as vulnerable by Goldman, lost 2%. To be sure, some on the Street expect these headwinds to be short-lived. Tom Lee, longtime market bull and head of research at Fundstrat Global Advisors, called Monday’s pullback a buying opportunity. “I think for the full year, [the] S & P is going to be higher, even by midyear, much much higher,” Lee said on CNBC’s “Squawk Box.” “January already proved to be a positive month for the market when it faced all these headwinds, so I think this one is another headwind, but another reason to be looking to buy the dip.” That said, if the trade conflict isn’t resolved promptly — or if tariffs increase further or retaliation escalates— the stock market could see more sustained volatility ahead. Some stocks were downgraded on the back of the tariff announcement, including Constellation Brands . Piper Sandler downgraded the Modelo beer importer to neutral from overweight. “If these tariffs lasted a full fiscal year, we recognize a potential $3.00-3.75 hit to F26E EPS, though potential pricing and volume headwinds make it difficult to estimate,” analyst Michael Lavery said in a note.
