AAPL Apple Inc

The major U.S. index futures are currently pointing to a sharply lower open on Monday, with stocks likely to see continued weakness following the downturn seen over the course of the previous session.

Concerns about a global trade war are likely to weigh on Wall Street after President Donald Trump officially imposed a 25 percent tariff on imports from Canada and Mexico and a 10 percent tariff on imports from China.

A statement from the White House said Trump is taking “bold action to hold Mexico, Canada, and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country.”

Trump also threatened possible tariffs against the United Kingdom and the European Union, marking a significant escalation.

Canada and Mexico ordered retaliatory tariffs on American goods, while China vowed countermeasures. The EU also warned of firm retaliation if targeted.

Investors fear that a trade war could hit the earnings of major companies and dent global growth. The tariffs could also lead to renewed inflation fears, leading the Federal Reserve to keep interest rates on hold for longer.

After showing a strong move to the upside early in the session, stocks came under pressure over the course of the trading day on Friday. The major averages pulled back well off their early highs and into negative territory.

The major averages finished the day just off their lows of the session. The Dow slid 337.47 points or 0.8 percent to 44,544.66, the S&P 500 fell 30.64 points or 0.5 percent to 6,040.53 and the Nasdaq dipped 54.31 points or 0.3 percent to 19,627.44.

For the week, the Dow rose by 0.3 percent, but the S&P 500 slumped by 1.0 percent and the Nasdaq tumbled by 1.6 percent.

Stocks showed a notable move to the downside in afternoon trading after White House press secretary Karoline Leavitt confirmed President Donald Trump’s threatened tariffs would be levied against major U.S. trading partners beginning Saturday.

Leavitt said the Trump administration would be implementing 25 percent tariffs on Mexico and Canada as well as a 10 percent tariff on China.

The White House press secretary said the tariffs were being imposed in response to the illegal fentanyl the countries have “sourced and allowed to distribute into our country, which has killed tens of millions of Americans.”

The news the tariffs will be implemented led to concerns about higher inflation keeping the Federal Reserve on hold for longer.

Earlier in the day, stocks benefited from a positive reaction to earnings news from Apple (NASDAQ:AAPL), which reported fiscal first quarter results that exceeded analyst estimates on both the top and bottom lines.

Shares of Apple pulled back well off their best levels as the day progressed, however, with the tech giant falling by 0.7 percent after surging by as much as 4.0 percent.

Buying interest was also generated in reaction to a closely watched Commerce Department report showing consumer prices in the U.S. increased in line with economist estimates in the month of December.

Meanwhile, a slump by shares of Chevron (NYSE:CVX) weighed on the Dow, with the energy giant plunging by 4.6 percent after reporting weaker than expected fourth quarter earnings.

Oil stocks moved sharply lower over the course of the session, dragging the NYSE Arca Oil Index down by 2.9 percent. The plunge by Chevron weighed on the sector along with a decrease by the price of crude oil.

An increase by treasury yields also weighed on housing stocks, as reflected by the 2.6 percent slump by the Philadelphia Housing Sector Index.

Natural gas, steel and transportation stocks also saw considerable weakness, while significant strength remained visible among networking stocks.

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