How Markets Are Reacting to Trump Tariffs: Mexican Peso, Car Stocks Fall

Global auto stocks sold off and Mexico's currency weakened, after President Trump hit Mexico, Canada and China with tariffs, prompting retaliation from Beijing and Ottawa. In recent trading:

European indexes dropped, after a defense-led rally Monday. Germany's DAX, which features some of the continent's biggest car makers, fell as much as 2%, as did Italy's FTSE MIB.

European auto stocks sank, including Stellantis, Volkswagen and Volvo. Asian peers such as Toyota and Hyundai also retreated.

U.S. stock futures were muted. The Dow industrials, S&P 500 and Nasdaq Composite had all fallen at least 1.5% Monday, after Trump said he would follow through with tariffs.

Wall Street's fear gauge, the VIX, edged higher. The volatility index had closed at its highest level of this year on Monday.

Mexico's peso weakened, nearing 21 to the dollar. It hasn't ended the day beyond that level since March 2022. The Canadian dollar and offshore Chinese yuan rallied, after selling off Monday.

Illumina shares fell nearly 4% premarket. Beijing is banning the U.S. biotech from exporting gene sequencers to China.

Japan's Nikkei 225 fell 1.2%, but indexes in China were little changed. Hong Kong's Hang Seng Index slipped; the Shanghai Composite edged higher.