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Traders boosted bets on Tuesday the Federal Reserve will start cutting its policy rate as soon as next month, as the White House said additional tariffs on imports from China will go into effect on Wednesday in a further escalation of trade hostilities that could slow the economy. Traders put about a 56% chance of a Fed interest-rate cut in May, up from about 40% earlier in the day, based on the prices of short-term U.S. interest-rate futures traded at CME Group. They expect at least four more rate cuts through the end of the year.

Lower energy prices are one of Trump's campaign promises, but an oil price crash could hit US producer margins.

Chicago Federal Reserve Bank President Austan Goolsbee said on Tuesday that U.S. President Donald Trump's announced tariffs are "way bigger" than had been modeled, and it's unclear how quickly or fully those higher costs will be passed on to consumers and to what degree businesses and consumers may react by hunkering down, slowing the economy. "We just lived through and learned what happens when inflation is raging out of control," Goolsbee said in an interview with Illinois Public Radio, in which he called tariffs a "negative supply shock" to which the Federal Reserve's response isn't necessarily clear.

TORONTO (Reuters) -CEOs of Canadian oil and gas producers said on Tuesday they are seeking to avoid making abrupt decisions about spending or production, as global oil prices hit four-year lows and recession fears grow. Canada, the world's No. 4 oil exporter, was spared the Trump administration's broad global tariffs on April 2 but faces U.S. tariffs on steel and cars. "My suspicion is that most companies will work to invest through this cycle, though I would also say that in price downturns, this industry does a really good job of shedding costs," said Jon McKenzie, CEO of oil sands producer Cenovus Energy, in an interview in Toronto.

German economic institutes have cut their forecast for this year to 0.1% growth from the 0.8% growth expected in September, two sources told Reuters on Tuesday, adding that the revision does not include yet the latest tariffs announced by the United States. The tariffs announced by President Donald Trump will deal a major blow to Europe's biggest economy, possibly putting it on track for a third year of recession for the first time in history. For 2026, the institutes forecast economic growth of just above 1.0%, the sources said, without giving an exact number.

Small business owners were feeling significant uncertainty in March even before Trump's biggest tariff plans were announced.

The administration has disappointed Wall Street amid the stock market’s avoidable tailspin.