Dollar Drops With US Futures on Tariff Uncertainty: Markets Wrap

The dollar slid and US futures tumbled as confusion over President Trump's 15% global tariff plan revived the "sell America" trade, with Nvidia earnings now in focus.

Wall Street futures and the U.S. dollar extended their decline in Asian trading on Monday as intensifying confusion over President Donald Trump's tariff strategy rattled investor confidence and revived the "sell America" trade. S&P 500 futures fell 0.7% while Nasdaq futures dropped 0.9%, reflecting heightened anxiety over the administration's shifting trade policy.

The turmoil follows a turbulent week in which the U.S. Supreme Court struck down Trump's previous "reciprocal" tariffs imposed under emergency powers. Hours after the ruling, Trump announced a new 10% global levy under Section 122 of the Trade Act only to hike it to 15% the following day, a move that appeared to surprise even some of his own officials.

"It is not yet clear when these tariffs would be imposed, what might be excluded and whether every country would be slapped with 15%," noted Rodrigo Catril, senior FX strategist at National Australia Bank. "Unless common sense prevails, we could be entering a circular process where new tariffs are announced, then potentially overturned, only for new tariffs to be announced, and we do the dance again." 

The Bloomberg Dollar Index slipped 0.4%, with the greenback losing ground against the yen, Swiss franc and euro. Goldman Sachs strategists attributed the broad dollar decline to "the fresh injection of policy uncertainty the ruling entails," warning it could "negatively influence investor and business activity." 

Adding to market complexity, the Treasury faces the prospect of refunding approximately $170 billion in tariffs already collected. Analysts suggest this could widen the fiscal deficit by half a percentage point to around 6.6% of GDP. Meanwhile, all eyes now turn to Nvidia's earnings, with the chip giant comprising nearly 8% of the S&P 500.