So much for trade peace. President Donald Trump kicked off the week by announcing he's cranking up tariffs on South Korea, and U.S. stock futures aren't exactly thrilled about it. In a Truth Social post Monday, Trump said he's raising tariffs on South Korean automotives, lumber, pharmaceuticals, and other major exports from 15% to 25%. His reasoning? South Korea hasn't "lived up to" what he's calling a historic trade agreement signed last July.
As of late Monday evening, futures are telling a mixed story. The S&P 500 Futures are basically flat, up just 0.05% or 4.25 points to 6,985.25. Nasdaq Futures are showing some optimism, climbing 0.24% or 62.25 points to 25,913.25. But Dow Futures? They're the pessimist in the room, down 149 points or 0.30% to 49,416.00.
The issue, according to Trump, is that South Korea's legislature hasn't passed the trade agreement he thought was a done deal. So naturally, tariffs are going up on some of the country's biggest export categories.
Over in Seoul, the reaction is measured but not exactly calm. South Korea's KOSPI index managed to recover after opening lower, trading up 0.62% at 4,980.26 on Tuesday morning. But if you zoom in on the companies with serious U.S. exposure, the picture gets uglier. Hyundai Motor Company (HYMLF) is down 1.93%, while Kia Motors Corp. (KIMTF) has dropped 2.96%. Those are the kinds of moves you'd expect when your biggest export market suddenly slaps you with higher tariffs.
Elsewhere in Asia, Japan's Nikkei 225 is barely budging, down just 0.04% at 52,860.35 in early trading. Food, electricals, and mining stocks are actually leading gains there, suggesting Japanese investors aren't too worried about contagion from the South Korea situation.
Meanwhile, precious metals had quite the Monday. Silver touched a jaw-dropping new record high of $117.69 per ounce before pulling back hard. It's currently trading at $109.92, still up a healthy 5.95%. Gold followed a similar script, hitting an all-time high of $5,111.21 before retreating to $5,066.83 per ounce, up 1.17%. When metals move like that, it's usually a sign investors are nervous about something.
Surprisingly, the U.S. Dollar Index is acting like nothing happened. It's essentially flat at 97.075, up a meaningless 0.01% against a basket of other currencies. You'd think fresh tariff threats would move the needle more, but apparently currency traders are shrugging this one off.
Looking ahead to Tuesday, investors have plenty to chew on beyond trade drama. Earnings season is heating up with reports from UnitedHealth Group Inc. (UNH), Boeing Co. (BA), and General Motors Co. (GM) all on deck. Plus, we're getting the Case Shiller 20-City Home Price Index and the Consumer Confidence Report earlier in the day. Between tariffs, earnings, and economic data, Tuesday's shaping up to be eventful.
