Dollar strengthens as stocks decline after Trump's tariff announcement

The U.S. dollar rose sharply on Tuesday after President-elect Donald Trump announced plans for tariffs on imports from Canada, Mexico, and China. This marked a shift from the previous day's market optimism following the nomination of Scott Bessent as Treasury Secretary. Stocks fell as investors reacted to Trump's tariff pledge, reversing gains from the prior session. The dollar gained 2% against the Mexican peso and strengthened against other currencies, while stock indices like the S&P 500 futures pointed lower. Trump's tariffs include a 25% tax on products from Canada and Mexico and a 10% tax on Chinese goods. This announcement contrasts with earlier market expectations that Bessent would moderate Trump's trade policies.