U.S. equity futures fell off a cliff on Thursday night. This decrease came in the wake of President Donald Trump’s announcement of a 35% tariff on imports from Canada, set to begin August 1. This announcement comes on the heels of new tariffs’ implementation. These measures include a punishing 50% duty on imported copper and a similar tariff on products from Brazil. The company, which is the parent of jeansmaker Levi Strauss, lifted its sales forecast for the current quarter. Consequently, the company’s stock surged nearly 6% as the broader market had a chance to digest these moves.
Levi Strauss had revenue of $1.32 billion, beating analysts’ estimates of $1.31 billion. The company indicated that it plans to absorb some of the impending tariff costs for the time being, a strategy that may help maintain its competitive edge in the market.
Even though Levi Strauss was able to find success, the rest of the market was pulled down by the tariff news. The Dow Jones Industrial Average gained 192 points, or 0.43%, finishing at 44,650.64 during regular trading. The S&P 500 Index rose just 0.27%, closing with strength at 6,280.46. The Nasdaq still managed to gain, albeit modestly, rising 0.09% to finish at 20,630.67.
Consumer discretionary was by far the best performing sector of the day, suggesting that overall consumer demand may be holding up in spite of macroeconomic headwinds. Among the most significant after-hours gainers were Mara Holdings and CleanSpark, both shooting up close to 3%. MicroStrategy added 1.8% in after-hours trading.
Unlike the challenging, if up-and-down, ride that was U.S. equities — but a small boon nonetheless — Bitcoin was ripping. On Tuesday it rose 4% to a new all‐time high of $11,6031.95, per Coin Metrics. Needless to say, investors are watching the cryptocurrency boom with wide eyes. Either way, this trend reflects an increasing desire to turn to alternative assets as traditional markets remain volatile.
Drew Pettit, Citi’s U.S. equity strategy director, provided helpful perspective on the new normal. He said, “Structurally, we’re not there yet. Fundamentally, I don’t think we’re there yet.” He elaborated further on the challenges facing sectors aiming for sustained performance: “If you want these types of sectors to continue to outperform more than just a tactical trade, you’re going to need the macro data to hold in there and the Fed to cut rates. It’s not an either or, structurally, I think it’s both and we’re not quite there.”
As investors navigate the complexities introduced by tariffs and shifting economic indicators, market sentiment remains cautious yet optimistic in certain sectors. The coming weeks may prove critical as companies adapt to new trade policies and seek ways to mitigate potential impacts on their bottom lines.