US equity investors will monitor the Trump administration's trade-related moves this week amid concern a global trade war is in the offing while evaluating mega-cap quarterly earnings and job growth.
* The US has imposed 25% tariffs on goods imported from Mexico and Canada, along with a 10% levy on China, triggering concern a global trade war could be in the offing if President Donald Trump imposes unilateral import duties on other trade partners.
* Trump has suggested imposing tariffs on goods imported into the US from the European Union due to perceived trade imbalances. During the presidential campaign, he discussed imposing tariffs on India for the same reason. Trump has also told Russia that it faces more sanctions in the absence of a deal soon to end the war in Ukraine.
* "The president invoked authority under [International Emergency Economic Powers Act] to levy these tariffs," Morgan Stanley economists and strategists wrote in a note Sunday. "There's debate among legal scholars about how this law can be used. Hence investors should keep an eye on the possibility of court challenges and injunctions."
* Early on Monday, futures linked to the S&P 500, the Nasdaq Composite, and the Dow Jones Industrial Average traded sharply lower amid a risk-off sentiment. The CBOE's VIX index soared 22% in pre-bell activity. The US dollar index was up 1.1%. US Treasury yields were mixed, with the 10-year down 3.4 basis points to 4.54%.
* Meanwhile, Amazon.com (AMZN), Alphabet (GOOG, GOOGL), Qualcomm (QCOM), NXP Semiconductors (NXPI) and Advanced Micro Devices (AMD) are among the companies reporting this week.
* Additionally, data due this week includes job openings and nonfarm payrolls. The Federal Reserve left interest rates unchanged for January, pausing its easing cycle, as inflation remains elevated. The labor market is not a major driving factor for prices, and it isn't necessary for jobs to weaken more to ease inflation further, Chair Jerome Powell said.
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