Washington escalates on two fronts as Nvidia’s big week begins

Hello, this is Anniek Bao writing to you from Singapore. Welcome to another edition of CNBC’s Daily Open.

Two fights Washington has been building toward this year came to a head Monday.

The Trump administration rolled out its toughest sanctions campaign yet against Iran and made clear China won’t be spared, while the U.S.-Canada trade relationship deteriorated further as Washington threatened to double auto tariffs to 50%.

Markets, meanwhile, are bracing for more tests this week: Nvidia’s earnings on Wednesday, an inflation reading, and the Fed’s Jackson Hole symposium.

Bessent unveils Iran sanctions plan

The Trump administration is threatening a forceful economic blow to force capitulation from Iran, which has long refused to bow to U.S. demands despite months of military hostilities and decades of sanctions.

Treasury Secretary Scott Bessent threatened economic punishment against any country doing business with Iran as part of what he called an “economic D-Day” campaign to isolate the Islamic Republic.

“We are launching an economic onslaught against Iran’s financial connections around the globe,” Bessent said at a press conference on Monday.

The U.S. will start by sharing deadlines with individual countries to “shut down activities we have identified,” Bessent said. “Any entity that facilitates money laundering on behalf of Iran will be removed from the U.S. dollar system,” he said. “The clock just started ticking.”

U.S.-Canada trade war escalates

The U.S.-Canada trade relationship deteriorated further Monday, with President Donald Trump vowing to double tariffs on Canadian autos, trucks, auto parts and steel to 50%, effective Jan. 1, 2027, following a breakdown in trade negotiations last week.

“Canada has been ripping off the United States of America for years,” Trump wrote in a Truth Social post, accusing the longtime trading partner of hurting U.S. farmers through its own tariff policies.

U.S. Trade Representative Jamieson Greer shifted the blame to Ottawa in an interview with CNBC on Monday. “They wanted more,” Greer said, arguing that Canada’s domestic politics derailed the deal that was close to completion.

Canadian Prime Minister Mark Carney similarly accused the U.S. of upending the deal by proposing “last-minute changes” that were “unfair, uneconomic.”

Markets wobble into a big week

Wall Street traders started the week on a downbeat note.

The S&P 500 index fell 0.28%, while the Nasdaq Composite lost 0.76%, weighed down by chip stocks, while the Dow Jones Industrial Average bucked the trend, edging up 0.26%.

Stock futures steadied as investors turned cautious ahead of Nvidia’s earnings, which could set the tone for the AI trade heading into the fall.

Traders will be keeping a close tab on inflation as well, with the personal consumption expenditure price index reading for July out on Wednesday.

Investors have another date circled with Fed Chairman Kevin Warsh, who is taking the stage at Jackson Hole, Wyoming, on Friday. His remarks…