Market Talk Roundup: Latest on U.S. Politics

Market Talks covering the impact of U.S. Politics and White House policies on companies and markets. Published exclusively on Dow Jones Newswires throughout the day.

1159 ET - Failing a deal between Ottawa and Washington, the imposition of a new U.S. tariff of 50% on certain Canadian goods could thwart Canada's recent rebound, says Bradley Saunders, economist at Capital Economics. The imposition of these tariffs, as early as this week, could trigger a tit-for-tat trade row with new Canadian tariffs, Saunders says. A deal also presents setbacks for Canada, Saunders says, arguing federal officials might have to give up "much of its already-limited leverage" to avert 50% duties. Canada is under pressure to find a resolution, Saunders adds, citing the deterioration in private-sector investment and a lack of progress on trade diversification. No deal would weigh on near-term growth although a recession looks unlikely, he says. (paul.vieira@wsj.com; @paulvieira)

1026 ET - U.S. and Canadian officials are in talks to either delay or scrap Trump administration plans to impose 50% tariffs on certain Canadian imports. The result of those talks will influence price growth and affect near-term inflation data, says Canadian research firm Signal49. The new 50% duty is set to kick in on Wednesday, failing a deal. Should no pact emerge, "consumer prices in Canada could be pulled in many directions," Signal49 says, citing the possibility of retaliatory tariffs from Ottawa. Signal49 says weaker domestic demand, stemming from job losses, could pull prices down, while a weaker C$ could elevate the cost of Canada's imports. (paul.vieira@wsj.com; @paulvieira)

0116 ET - The growing disconnect between geopolitical uncertainty and asset-price volatility has been a puzzling feature of markets in recent months, says Federated Hermes's John Sidawi in a note. Event risk has remained notably elevated since late February, driven largely by the conflict in the Middle East and an increasingly unpredictable policy backdrop from the U.S., but "this does not appear to be reflected in either implied or realized volatility," says the fixed income portfolio manager. The most compelling explanation for the current volatility puzzle is not that investors have become complacent, but that they have become exhausted, he says. For now, markets appear willing to tolerate a significant amount of uncertainty without demanding higher risk premiums, while this equilibrium is unlikely to be permanent, he says. (emese.bartha@wsj.com)

(END) Dow Jones Newswires

August 17, 2026 11:59 ET (15:59 GMT)