Tariff Tensions: US Markets React to Trump's Latest Threats

In the latest market developments, U.S. stock index futures saw a downward trend early Monday as President Donald Trump announced fresh tariff threats impacting the European Union and Mexico. These moves come amid a pivotal week for the markets, with a slew of economic data and second-quarter earnings reports from major banks expected to influence future trends.

Trump's announcement outlined plans for a 30% tariff on most EU and Mexican imports, set to take effect on August 1, if a deal is not reached beforehand. The European Union responded by extending its suspension of countermeasures and called for a negotiated resolution. Analysts believe the market's muted reaction reflects an understanding that such threats are seen as a negotiating tactic.

As Wall Street approaches key reporting and data periods, investors are also eyeing potential shifts in Federal Reserve policy, with no immediate rate cuts expected in July but a 60% chance for September. Market watchers are attuned to ongoing tension between the White House and Fed, notably after Trump's economic adviser hinted at potential action against Fed Chair Jerome Powell.

(With inputs from agencies.)