Trump's Tariff Talk Shakes Up ETF Sectors, Assets Classes
Late pause on Mexico’s tariff hikes boosts EWW, but Canada remains in the sites.
The Trump administration’s weekend promise to implement a program of tariffs rattled stock, bond and crypto markets Monday morning, as traders alternatively punished and rewarded asset classes and sectors expected to be most impacted.
Among exchange-traded funds, the volatility hit the broad equity market indexes with unbiased force, driving the SPDR S&P 500 ETF Trust (SPY) and the iShares Russell 2000 ETF (IWM) down more than 1.3% at the opening bell. Both ETFs pared their deepest losses after several hours of trading, particularly after the U.S. and Mexico agreed on a one-month delay to the duties around 10:30 a.m. ET.
The iShares MSCI Mexico ETF (EWW) reversed earlier declines to rally after the tariff delay. It gained 2.5% shortly after midday but dipped almost 6% since earlier Monday.
Canada and Mexico have been singled out by President Trump for increased tariffs. Trump has said the added fees will pressure the countries to boost efforts to cut the flow of illegal drugs into the U.S. Both of those nations' financial markets dipped upon opening.
More Tariff Uncertainty Ahead
Meanwhile, the iShares MSCI Canada ETF (EWC) remained negative, falling nearly 7% from Friday to early Monday. At midday, it had declined 1.5%.
Paul Schatz, president of Heritage Capital in Woodbridge, Connecticut, said investors should brace for more unrest.
“Back-to-back blue Mondays,” he said. “The markets seemingly did not believe Trump would follow through with the tariffs, and price action this morning suggests we’re revisiting the lows from last week’s DeepSeek selloff.”
Underscoring the whipsawed ride of EWW Monday morning, Schatz said, “This is part of the sell-the-rallies theme we are employing in the first quarter. This bull market isn’t over.”
Commodities including oil lost earlier gains. The United States Oil Fund LP (USO) rose more than 3% from Friday’s low to just before Monday's market open. It had lost half of a percentage point midday.
Meanwhile, the SPDR Gold Shares ETF (GLD) stands out as one of the steadier outliers amid the broader selloff.
GLD, which is up 38% over the past 12 months, pared earlier gains and was higher by 0.6% midday.
