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.

1021 ET - The uncertainty around trade tensions between the U.S. and Canada could weigh on Canadian economic growth in 2026. UBS economists say that while the share of exports affected is relatively small "the impact on the outlook for Canadian growth could be larger than just the direct hit from weaker exports." Spiraling trade tensions could "once again bring uncertainty for businesses and consumers," they add, just when business sentiment and consumer spending were beginning to improve in Canada. As a result of the resurfaced uncertainty, UBS downgrades Canada GDP growth to 0.9% on an annual average basis, from 1.0% previously, which could be larger from "potential upstream/downstream supplier effects, price elasticity of demand, and potential investment response." (adriano.marchese@wsj.com)

0923 ET - Let there be no doubt that an intensified trade conflict between the US and Canada will cause significantly more damage for America's northern neighbor, says Karl Schamotta, chief market strategist at global-payments firm Corpay. "Businesses will close and jobs will be lost if the conflict drags on," he says. Canada is set to unveil retaliatory tariffs targeting US goods, but Schamotta say they won't help because they are taxes on domestic consumption that "do little to shift trade balances." Yet, based on pricing in the options market, Schamotta says traders are willing to pay more for hedges against weakness in USD than CAD. That, he adds, indicates markets still expect a deal between the US and Canada. (Paul.Vieira@wsj.com; @paulvieira)

0853 ET - Oil futures lose more ground with the market seeing stepped-up U.S. economic pressure on Iran more likely to lead to negotiations than military escalation. "Some signs of diplomacy out here in what is a long market and likely making it worse as Pakistan is delivering a peace offer to Iran and the U.S. is returning staff to their posts in the Middle East," Scott Shelton of TP ICAP says in a note. "The near term looks like the U.S. Treasury has bought some time for the oil market in terms of generating enough fear to end the buying for now from speculators." The New York Times reported that the U.S. is preparing to return diplomats to their posts in the Middle East. WTI is off 3.1% at $82.42 a barrel, and Brent is down 3% at $89.40 a barrel. (anthony.harrup@wsj.com)

0541 ET - Oil prices extend losses, falling more than 2.5% as investors see lower supply risks from fresh U.S. sanctions than from military escalation in the Middle East. In midmorning European trade, the front-month Brent crude contract is down 2.6% to $89.72 a barrel, while WTI futures slide 2.7% to $82.67 a barrel. "With no further military escalation and some tankers slipping through after buying heavily discounted oil to compensate for the elevated transit risk, the market remains in limbo," Saxo Bank analysts say. "However, the drawn-out disruption continues to tighten the availability of crude and, not least, refined products, leaving the market vulnerable to renewed price spikes should flows deteriorate again." (giulia.petroni@wsj.com)

0538 ET - U.S. Treasury yields edge lower in European mid-morning trade while the dollar is steady as investors digest the Treasury's decision to increase long-end debt buybacks and its plan to economically isolate Iran. "Financial markets are heading into a heavy run of catalysts following their reaction to Treasury Secretary Scott Bessent's moves on long-dated Treasury buybacks and the latest sanctions against Iran," says the The Revacy Fund's Zaheer Anwari in a note. Treasury yields remain at elevated levels as markets await the next round of U.S. economic data, he says. The 10-year Treasury yield falls 1.6 basis points to 4.886%. The DXY index is stable at 99.028. (emese.bartha@wsj.com)

0447 ET - Sterling rises to a one-week high against the euro, recovering to levels seen before the U.S. Treasury announced increased buybacks of long-term securities. This signals that the positive premium in the euro has been scaled back, ING's Francesco Pesole says in a note. "If calm is indeed restored in the bond market, expect the pair to return to tracking short-term rate differentials closely." Sterling is likely to turn lower against the euro in coming months as expectations for interest-rate rises by the Bank of England look excessive, he says. The euro falls to as low as 0.8544 pounds and ING expects it to reach 0.8700 over the next few months. (renae.dyer@wsj.com)

0323 ET - Oil prices fall in early trading, with Brent crude below $90 a barrel despite U.S. plans to tighten economic pressure on Iran. The global oil benchmark is down 0.8% to $89.84 a barrel, while the U.S. gauge WTI slips 0.7% to $84.37 a barrel. Treasury Secretary Scott Bessent said the U.S. was sanctioning more than 60 entities, individuals and vessels tied to the regime, but didn't outline any specific steps against individual countries like China, a major buyer of Iranian oil. "The market seems largely unfazed by Washington's push for tighter economic pressure on Iran, with traders treating the U.S. effort to nudge partners away from Iranian trade as marginal rather than market‑moving," analysts at ING say. (giulia.petroni@wsj.com)

0255 ET - The dollar rises to a one-week high against a basket of currencies after Treasury Secretary Scott Bessent announced new sanctions aimed at Iran. Bessent warned that countries and companies that do business with Iran will face retaliation from the U.S. However, he didn't outline any specific steps the U.S. would take against individual countries, including China. The threat of exclusion from the dollar-based financial system stoked speculation that some countries and banks might buy dollars pre-emptively, lifting the dollar, IG analysts say in a note. The DXY dollar index rises to as high as 99.106. (renae.dyer@wsj.com)

2310 ET - The U.S. Treasury's potential use of its cash balance can "buy time, but it cannot buy fiscal credibility," State Street Investment Management's Masahiko Loo says, noting a CNBC report citing two senior officials that the Treasury could use its General Account to fund increased buybacks announced last week. "Buybacks may improve market functioning and temporarily stabilize the [Treasury yield] curve, but they do not reduce the debt burden itself. Nor can they fully offset fiscal concerns, rising AI-driven capital demand, or the longer-term refinancing risks associated with greater reliance on bill issuance," the senior fixed-income strategist adds. (ronnie.harui@wsj.com)

2228 ET - Copper declines in Asia trading. The market for the base metal appears to be increasingly difficult to interpret, given a new set of forces affecting prices, centered on geographic arbitrage and trade policy, say Societe Generale analysts in a note. Limited mine supply and growing demand from sectors such as artificial intelligence have generally supported prices, they note. However, tariff-related arbitrage has redirected large volumes of copper inventories toward the U.S., affecting stockpiles elsewhere and making the market difficult to analyze based on traditional frameworks alone, they add. The three-month copper futures contract on the London Metal Exchange falls 0.3% to $14,225.50 a metric ton. (megan.cheah@wsj.com)

1448 ET - President Trump's fresh threat to double auto tariffs on Canada targets an important pillar of the U.S.-Canada trade relationship, says Olu Sonola, head of U.S. economics at Fitch Ratings. Trump vows on Jan. 1, 2027 to impose a 50% duty on Canadian-made motor vehicles and on previously-exempt auto parts. Canada supplies 13% of total U.S. vehicles and parts, Sonola says. "The uncertainty alone will strain the highly integrated North American auto supply chain," the economist says. She warns that should Trump follow through with his auto threat, the duties "could force a significant and economically disruptive restructuring of Canada's auto industry, with lasting consequences for its manufacturing base and broader economy." (Paul.Vieira@wsj.com, @paulvieira)

1357 ET - Oil futures extend losses as U.S. Treasury Secretary Scott Bessent announces the plan to isolate Iran with sanctions against anyone doing business with the country. Although the sanctions are broader-reaching, much of the attention will be on the implications for Iran's oil exports, David Oxley of Capital Economics says in a note. Depending on whether the sanctions accelerate or delay a resolution to the conflict, they could still have a sizeable impact on the energy landscape, he says. "In practice, though, we suspect that the new package will have only a limited direct impact on Iranian energy flows in the short term" as most oil exports go to China which has not recognized U.S. sanctions in the past, Oxley adds. WTI is down 2.6% at $84.80 a barrel and Brent is down 2.5% at $92.99.