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.

1033 ET - The escalation in U.S.-Canada trade tensions -- with President Trump now threatening 50% tariffs on all Canadian autos and auto parts -- tilts toward the Bank of Canada cutting rates in the months ahead, says Sebastien Mc Mahon, chief economist at IA Financial Group. The new 50% tariff on $20 billion of Canadian goods "are a real downside risks." He expects the BOC at its Sept. 2 decision to keep the policy rate steady at 2.25%, and flag trade tensions as a downside risk to growth. There's no urgency for the BOC to act, given a pickup in growth in 2Q and solid hiring in recent months. "If the trade damage shows up in the hard data this fall, the door to a rate cut stays open," Mc Mahon says. (paul.vieira@wsj.coml @paulvieira)

1024 ET - Heavyweight industrial and export-focused Canadian names are bearing the brunt of a sell-off as markets digest U.S. cross-border supply chain disruption. Among the biggest decliners are manufacturing and auto-parts stocks like Magna International, Linamar and also transformers and electrical equipment manufacturer Hammond Power Solutions, all of which face immediate headwinds under the non-CUSMA content penalties. Aerospace, materials and tech growth plays are also pulling back, including business-jet maker Bombardier, BlackBerry, specialty semiconductor producer 5N Plus and satellite maker MDA Space. Toronto indexes, however, remain flat as gains in mining, metals and financials offset the pressure. (adriano.marchese@wsj.com)

1021 ET - The breakdown in U.S.-Canada trade talks does not bode well for the future of the USMCA trade treaty, which exempts the bulk of U.S.-bound Canadian exports from tariffs, says Bradley Saunders, economist at Capital Economics. Canada PM Mark Carney said this weekend the prospect of an intensified U.S.-Canada trade conflict marked a setback about USMCA. The Trump administration declined in July to renew USMCA for another 16 years, and instead subject the deal to annual reviews for a decade. This increases the risk of U.S. withdrawal from the pact. Saunders says a renewed trade war will delay USMCA talks, "dealing yet more damage to business sentiment and creating fresh challenges for the Bank of Canada as it balances worsening growth and inflation prospects." (paul.vieira@wsj.com; @paulvieira)

0939 ET - The Bank of Canada is likely to be on hold through the rest of 2026 and the first half of 2027 as it assesses the impact from the escalation of trade tensions between Ottawa and Washington, says BofA Securities economist Carlos Capistran. The hit to the Canada GDP might end up being modest, but Capistran says he anticipates sizable damage to business confidence. "Renewed uncertainty is likely to weigh on investment, and potentially hiring, more than the tariffs themselves," Capistran says. Canada's economy had exhibited encouraging signs of life, but America's new 50% tariff, Ottawa's intention to retaliate and elevated uncertainty "are likely to cap the upturn and keep the BOC cautious." (paul.vieira@wsj.com; @paulvieira)

0926 ET - Investors should avoid worst-case scenarios about the Canadian economy in the aftermath of failed U.S.-Canada trade talks and threats of a renewed trade war, says Derek Holt, economist at Bank of Nova Scotia. "Resist the temptation to go to the darkest place," he tells clients in an analysis about the state of U.S.-Canada trade. He says the 50% tariff would represent a "micro shock" to the broader economy, as it targets 5% of total Canadian exports to U.S. Canada's decision to delay implementation of retaliatory tariffs until after Labor Day leaves open the possibility of renewed talks toward a resolution. Holt adds initial CAD weakness and lower bond yields will provide some support to Canadian exporters, alongside an expected dose of federal stimulus. (paul.vieira@wsj.com; @paulvieira)

0704 ET - The Swiss tech industry is experiencing a modest recovery, with an increase in sales and exports, but higher U.S. tariffs threaten to stifle the rebound, Swissmem says in a statement. Since the end of July, the U.S. has imposed a new tariff rate of 12.5% on goods from the Swiss tech industry, which is higher than the levies applied to products from the EU, the Swiss tech trade group says. "Should the tariff differential with the EU increase, the consequences would be severe," it says. "An agreement that does not put us at a disadvantage relative to our most important competitors remains essential," Chairman of Swissmem Martin Hirzel says. (andrea.figueras@wsj.com)

0659 ET - For Canadian wood products companies, exposure to the new U.S. tariffs should be minimal and manageable, says RBC's Matthew McKellar. In a report, the analyst says that the trade friction primarily hits niche value-added products like engineered wood, paperboard and corrugated boxes. For those, operational flexibilities and shifting where products are produced give Canadian producers a buffer against the worst drag on earnings. Meanwhile, major commodities such as lumber and oriented strand board are completely exempt from the new tariffs, McKellar notes. Still, he says that the tariff environment remains dynamic and there is "significant uncertainty around potential further action by either the U.S. or Canada." (adriano.marchese@wsj.com)

0656 ET - The Canadian dollar's losses could remain contained for now following the collapse in U.S.-Canada trade negotiations, MUFG Bank's Derek Halpenny says in a note. There was always a risk of a breakdown in talks to avoid U.S. tariffs on Canadian goods, so there is unlikely to be a large selloff in the Canadian dollar in the near term, he says. Elevated oil prices also remain supportive. However, the medium term implications of the trade spat for the currency depends on whether the situation intensifies and investors price in greater economic harm for Canada, he says. "Canadian dollar downside risks will intensify the longer there is no resolution to this escalating trade war." The U.S. dollar rises 0.5% to 1.3831 Canadian dollars. (renae.dyer@wsj.com)

0609 ET - Bitcoin is increasingly trading as both a risk-sensitive asset and a hedge against fiscal and monetary policy uncertainty, Zaye Capital Markets analyst Naeem Aslam says in a note. President Trump's comments about tariffs, Iran and larger household tax refunds reinforce broader concerns about inflation, government borrowing and geopolitical risk, he says. Those forces can support bitcoin's longer-term "hard asset" narrative. However, continued gains in bitcoin require real spot buying rather than forced liquidations once crowded bets on the cryptocurrency falling are exhausted, he says. "That makes institutional flows, regulatory progress and Treasury-market conditions more important than simply tracking momentum." Bitcoin rises 1.5% to $77,406 after reaching a three-month high of $79,455 on Friday, LSEG data show. (renae.dyer@wsj.com)

0604 ET - U.S. Treasury yields decline, helped by lower oil prices and prospects that the Treasury might act again to tame high yields. The dollar rises on safe-haven demand ahead of Treasury Secretary Scott Bessent potentially unveiling sanctions against Iran later Monday. Global bonds are enjoying a small rebound but remain vulnerable, Pimco's Marc Seidner and Pramol Dhawan say. "Rising sovereign debt loads, a surge in AI-related corporate bond issuance, and lingering inflation anxiety tied to energy costs--and what that means for central bank policy--all play a role." The 10-year Treasury yield declines 2.8 basis points to 4.709%, according to Tradeweb. The 30-year yield falls 2.6 basis points at 5.249%. The DXY dollar index rises 0.2% to 99.00. (emese.bartha@wsj.com)

0424 ET - Gulf markets face pressure this week from potential tightening sanctions on Iran and elevated U.S. Treasury yields, Iridium Advisors says. The consultancy says details of what U.S. Treasury Secretary Scott Bessent has called the "toughest sanctions in history" could push negotiations with Iran further out of reach, while the U.A.E.'s halt to trade and financial transactions with Tehran may raise questions over corporate exposure to Iranian customers, suppliers and payments. Higher Treasury yields could also lift regional discount rates and borrowing costs, weighing particularly on real estate, utilities, infrastructure and telecom stocks. (farhan.rafid@wsj.com)

0420 ET - The U.S. Treasury's attempt to dampen the rise in bond yields under the guise of scaled-up liquidity operations has only drawn more attention to underlying issues, ING's Benjamin Schroeder says in a note. The growing U.S. debt load and the limited ability or willingness to rein in the U.S. deficit have received more attention, the rates strategist says. "While it has been signalled that some announcements to cut back on wasteful spending will be made in coming days, without a big rethink coming from Congress, we are only looking at trimming the edges," Schroeder says.