Trump's February 1 tariff deadline sends US stocks lower, gold and oil prices surge

The tariff talk has been looming since last year, and with President Trump increasing the threat after the inauguration, global market reaction next week will be closely tracked.

US President Donald Trump's February 1 tariff deadline has sent Dow futures lower by nearly a percent, while gold and crude oil prices have risen higher overnight.

Earlier in the day, the White House confirmed President Trump's plan to implement 25% tariff on neighbouring countries Mexico and Canada, and a 10% tariff on China from Saturday, wiping off strong gains and sending Wall Street lower at close.

US 10-year yield rose by two basis points to 4.54%. Crude prices jumped with WTI crude above $74 per barrel, while gold prices crossed $2,800 / oz for the first time on rush for safe haven buying.

The measure of fear - CBoE VIX - rose on Friday on the back of the tariffs fears.

"The President will be implementing tomorrow 25% tariffs on Mexico, 25% tariffs on Canada, and a 10% tariff on China for the illegal fentanyl that they have sourced and allowed to distribute into our country, which has killed tens of millions of Americans," White House spokesperson Karoline Leavitt said.

The White House also denied a Reuters report that talked of some exclusions on tariff rather than a blanket measure, and that tariffs would be delayed until March 1.

On being asked if Trump's threats were being used as a bargaining tool, President Trump said, "No, it's not ... we have big (trade) deficits with, as you know, with all three of them."

"There’s a lot of uncertainty out there right now and also wait-and-see attitude on the geopolitical stage with tariffs,” CNBC quoted Bob Haberkorn, senior market strategist at RJO Futures.

"Bulls have tried their best to keep calm and carry on through all the turbulence this week, but the pressure of uncertainty keeps them from peacefully grazing on stocks," Bloomberg News quoted Max Gokhman of Franklin Templeton Investment Solutions.

The tariff talk has been looming since last year, and with President Trump increasing the threat after the inauguration, global market reaction next week will be closely tracked.

US economists fear the tariffs may reignite inflation as price pressure seems to be starting to ease.