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Yesterday, stocks bounced back from their lows, largely driven by news of a temporary reprieve in the trade war. President Donald Trump agreed to delay new tariffs on Mexico for another month. Despite the positive development, the S&P 500 and Nasdaq 100 still closed 0.8% lower, with all members of the "Magnificent 7" except Meta taking a hit on Monday.

On a brighter note, Tyson Foods soared, as the ongoing love affair Americans have with chicken helped the company exceed earnings-per-share expectations by 10% for the sixth quarter in a row. This success also lifted Costco, a go-to for rotisserie chicken, to an all-time high.

Traders find themselves in the thick of a fast-evolving trade conflict.

Although President Trump backed off from imposing tariffs on Mexican imports (seriously, why is it always "slapping" tariffs?) and a last-minute deal with the Canadians spared some duties on imports from Canada, it’s worth pausing to consider the countermeasures Canada had in store.

Canada unveiled a list of retaliatory 25% tariffs on U.S. goods, set to take effect at the same time as Trump’s tariffs. This move shows that Canada is anything but caught off guard and stands ready to apply pressure to its largest trading partner if necessary.

The proposed tariffs targeted over $30 billion in goods, including everything from paper to palladium, and even playing cards. A range of American food and beverage items — such as produce, sauces, baked goods, beer, and wine — would have been impacted.

Monday’s trading saw a sharp sell-off in the morning, which reversed shortly after the Mexican government announced an agreement to delay the tariffs.

Meanwhile, homebuilder stocks have taken a hit as the prospect of rising lumber prices due to Trump’s tariffs on Canada looms large. While falling long-term interest rates might normally give homebuilders a boost as mortgage rates decline, the reality is that building homes still relies heavily on lumber, much of which comes from Canada.

Bottom line: you’d better have a good sense of which way the trade winds are blowing before jumping into the market, because even the slightest piece of news can send stocks soaring or plummeting.

Although Mexico and Canada managed to strike a deal to delay the tariffs for another month, Trump’s frequent use of tariffs as a blunt instrument to achieve short-term objectives (just look at his actions with Colombia last month) means the market could experience more volatility. That market whiplash might only last a day or even a few hours, but at least some countries are ready to dig in their heels for the long haul if necessary.

And just as an interesting tidbit—mattresses made the list of goods involved in the trade. The US exported $123 million worth of mattresses to Canada last year.

Nvidia finds itself swept up in a trade war it didn’t sign up for.

The company’s momentum has slowed a bit since the unveiling of DeepSeek, a Chinese-created AI model that many industry insiders view as a threat to the narrative that dominating the space requires stockpiling expensive Nvidia chips. Whether that’s true or not is beside the point, but it has made Nvidia’s stock more vulnerable to any negative headlines.

This could explain why Nvidia felt the sting when a 10% tariff on Chinese imports triggered a semiconductor sell-off. Ironically, Nvidia has relatively limited exposure to China compared to some of its competitors. Only about 17% of Nvidia’s revenue comes from the country—far less than its rivals like Intel (29%) or Qualcomm (66%).

The Bottom Line:

Any turbulence in the semiconductor sector could create a ripple effect for Nvidia, at least until the uncertainty surrounding DeepSeek is resolved.

Quick Signal:

• Bitcoin shook off its Sunday-night slump, briefly dipping below $93,000 before bouncing back to reclaim six figures by Monday, climbing over 9% on news that Trump's tariffs on Mexico would be postponed for at least a month.
• Car manufacturers like GM and Ford also saw dramatic moves, initially starting lower at Monday's open but quickly recovering most of their losses, fueled by the same tariff news.
• Palantir hit an all-time high before blasting off even further after reporting earnings, surging 15% in after-market trading.

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