Morning Bid: Tariff reprise

• Trump's new tariffs target $20 billion in Canadian goods (5% of exports) at 50% rate, with Canadian PM Mark Carney vowing to negotiate a resolution
• Alphabet leads Big Tech earnings this week, expected to report 21% revenue growth to $117 billion and 64% annual cloud revenue growth amid AI-driven demand concerns
• Asian stocks rallied on lower oil prices, with Brent crude falling below $90/barrel despite Houthi threats to Saudi shipping opening potential new conflict front

Market Summary: Tariff Reprise

Key Developments

Geopolitical Tensions: U.S.-Iran conflict entered its 10th day, though markets showed fatigue with the back-and-forth escalation. Brent crude prices dipped below $90 per barrel despite Iran's threats to block Saudi shipping. Asian markets rallied Tuesday with Tokyo and Seoul stocks up briskly, while U.S. futures turned positive.

Trump Tariff Action: Former President Trump announced 50% tariffs on approximately $20 billion of Canadian imports starting next month, targeting wine, cement, and clothing—representing roughly 5% of Canadian exports to the U.S. Canadian PM Mark Carney pledged to intensify negotiations to resolve the dispute.

UK Political Changes: New Prime Minister Andy Burnham surprised markets by appointing his finance minister, raising speculation about potential carve-outs for defense spending from fiscal rules. His administration announced plans to scrap rail fare increases, funded by eliminating a digital ID program, potentially easing UK inflation pressures and reducing Bank of England tightening expectations.

Big Tech Earnings Focus: Alphabet reports Wednesday, expected to show 21% revenue growth to $117 billion (from $96 billion year-over-year) and 64% cloud revenue growth. The stock has underperformed peers, down 10.09% over three months versus Meta's 6.12% gain, amid AI model delays and employee departures.

Market Implications

Energy markets showed resilience despite Middle East tensions. Trade war rhetoric between the U.S. and Canada could impact bilateral commerce. UK policy shifts may influence inflation trajectories and monetary policy. Tech sector earnings will test investor confidence in AI-driven growth narratives amid rising market anxiety about demand sustainability.