Sectors from crypto to autos were hit hard Monday as investors assessed the potential damage from a looming trade war after Canada responded to Trump’s tariffs with billions in retaliatory levies.

The Dow Jones Industrial Average, S&P/TSX Composite Index and Nasdaq Composite Index all opened the week down, but partially recovered following Mexican President Claudia Sheinbaum’s announcement that Mexico and the U.S. had reached a deal delaying a 25 percent tariff on the country’s imports by a month. At close Monday, the S&P/TSX Composite, which tracks the largest companies on the Toronto Stock Exchange, was down 1.14 per cent.

Jefferies Financial Group said this is likely just the beginning, predicting an “immediate” drop of the key index of more than 10 per cent that could extend to 20 per cent “when the dust settles.” CIBC, meanwhile, predicted a five per cent drop over the course of the week.

• Canadian dollar: The loonie fell to $0.68 Monday, its lowest level in more than two decades, before ticking up upon U.S. and Canada reaching a deal. That could end up being helpful, RBC economists wrote, as a weak Canadian dollar “will buffer the price shock for Americans,” reducing the drop in demand for tariffed goods.
• Energy: Canadian energy stocks mirrored international stock indices, opening the week down but recovering following Mexico’s tariff reprieve. Shares in Enbridge and Canadian Natural Resources were down 0.45 per cent and 1.12 per cent respectively by the close of trading Monday, while TC Energy was up 0.73 per cent. Energy represents about 27 per cent of Canadian merchandise exports to the U.S. Scotiabank analysts said U.S. tariffs could motivate Canadian energy producers to seek buyers in new markets, calling the share price drop a “buying opportunity.” 
• Oil: The prices of WTI and Brent Crude were up less than one per cent, as tariffs are expected to cause a supply crunch that will make it more expensive.
• Autos: Shares of the Big Three automakers—GM, Ford and Stellantis, which all rely heavily on cross-border trade—were hit hard Monday. Canadian auto-parts makers Linamar, down 4.86 per cent Monday afternoon, and Magna International, which dropped 6.18 per cent, were hit even harder. 
• Tech: Big Tech wasn’t spared from the broader sell-off. Shares in Alphabet, Microsoft and Apple all slumped. Nvidia, the world’s third most valuable company, was down 3.46 per cent early Monday afternoon, continuing a sell-off prompted by the release of Chinese AI model DeepSeek and Trump’s pledge to tax foreign semiconductor chips. Even bitcoin briefly fell below US$93,000 Monday morning.

• Looking ahead: RBC economists say tariffs will have a ripple effect throughout the economy. For example, an auto plant having difficulty selling cars because they’ve become so expensive will lay off workers, who will then have less money to spend on things like movie tickets. “A persistent tariff of the magnitude proposed is recessionary for Canada,” said Jason Daw, RBC’s head of North American rates strategy, in an email. The Bank of Canada will likely try to soften the effect on the Canadian economy by lowering interest rates more than it had planned, he said.