U.S. equities opened the week under pressure as investors digested President Donald Trump’s decision to raise the baseline tariff on imports to 15%, reversing initial optimism sparked by the Supreme Court’s partial invalidation of prior duties. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all retreated, while the U.S. dollar weakened, reflecting renewed uncertainty over global trade flows and policy durability.

Trade Policy Volatility Returns to Center Stage

The Supreme Court’s ruling late last week had briefly buoyed sentiment, as markets interpreted the decision as a potential step toward easing tariff burdens. However, Trump’s swift pivot to implement a fresh 15% baseline tariff — effective immediately — has revived concerns about prolonged trade friction.

European officials responded firmly, stating that previously negotiated trade agreements must be honored and urging Washington to clarify its next steps. The U.S. customs agency confirmed it will cease collecting tariffs that were struck down, but the policy transition has left companies navigating a shifting regulatory landscape.

For global supply chains, the critical issue is predictability. Businesses must reassess pricing models, sourcing strategies, and margin assumptions amid fluctuating import costs. Markets tend to discount policy risk aggressively when legal and executive signals diverge, amplifying volatility across equities and currencies.

Oil Climbs as Geopolitics Intensify

Beyond trade tensions, geopolitical risk remains elevated. Oil prices advanced after posting gains exceeding 5% last week, supported by the prospect of renewed U.S.–Iran nuclear talks set for Thursday. The U.S. military buildup in the Middle East continues to add a risk premium to energy markets, as traders weigh the possibility of supply disruptions against diplomatic progress.

Brent and West Texas Intermediate futures edged higher Monday, reinforcing the energy sector’s resilience despite broader equity weakness. Higher oil prices, however, complicate the inflation outlook, particularly as tariff-driven cost pressures persist.

Monetary Policy and Earnings in Focus

On the macroeconomic front, Federal Reserve Governor Chris Waller indicated that his support for a potential March rate cut hinges on the upcoming jobs report. A robust employment reading could tilt policymakers toward maintaining current rates, underscoring the delicate balance between growth resilience and inflation control.

Investors are also preparing for Nvidia’s earnings release on Wednesday, one of the final major reports of the season. As artificial intelligence spending expectations face scrutiny, Nvidia’s results could serve as a barometer for broader tech sector sentiment.

Looking ahead, markets remain caught between trade policy uncertainty, geopolitical risk, and monetary policy recalibration. The immediate trajectory will likely depend on clarity around tariff implementation details and the tone of upcoming economic data.