As the U.S. and Canada stare down tens of billions of dollars in dueling tariff regimes as a result of President Trump’s new trade war against the nation’s second-biggest trading partner, companies, economists, and investors are back in the game of attempting to forecast the level of volatility to expect on corporate balance sheets and in stock prices.

The U.S. government’s 50% tariffs on a wide range of Canadian goods were met with Canada’s $20 billion in retaliatory tariffs slated to go into effect on Sept. 8. They encompass more than 700 U.S. goods, meant to mirror the size of Trump’s import taxes on Canadian wine, cement, hockey sticks and more. The counter-tariffs, which range from 15% to 50%, target a wide array of U.S. imports into Canada, including dairy, seafood, appliances, wood and paper products, and clothes.

There were some real-time market winners as the new trade war dominated headlines last Monday. Consider the reaction in steel and materials stocks, including Nucor, Steel Dynamics, Cleveland-Cliffs and Century Aluminum, which all shot up on Monday after the U.S.-Canada trade talks broke down, and after many had fallen the week before on bets a new U.S-Canada deal would lower tariffs on steel and aluminum. The VanEck Steel ETF (SLX) rose 1.6% on Monday alone, while the State Street Materials Select Sector SPDR (XLB) hit an intraday all-time high — surpassing its previous all-time record price reached in February — as the metals stocks and other producers rallied.

But the new trade war rally didn’t last. XLB ended the five-day trading week in negative territory and SLX was close to flat. To be sure, these funds have already booked some hefty gains in 2026. Year-to-date, both ETFs are beating the S&P 500, with SLX up over 28% and XLB up over 18%, according to Morningstar data as of Aug. 28.

Atsi Sheth, chief credit officer at Moody’s Ratings, said uncertainty is the watchword now. “Expect much more of this uncertainty for some time to come,” Sheth said.

Which businesses win in a trade war and which lose depends on an increasingly complex supply chain. One of the most complicated is the auto sector, where parts cross back and forth over the border multiple times in the production of a vehicle.

“For the auto sector, our view is that the sector is so integrated that the tariffs just don’t impact the country you are tariffing but your own country,” Sheth said of the U.S.-Canada automobile manufacturing ecosystem.

U.S. steel companies are more likely to benefit, she said, because the U.S. market is larger.

“The auto sector, there are no winners. Steel … U.S. has a little edge,” Sheth said.

“The new tariffs create a meaningful but manageable headwind,” said Angelo…

Aluminum closed in on prices not seen since 2022 following Iranian attacks on two Middle Eastern producers over the weekend, heightening fears of a supply crisis for the industry. 

Futures prices on the London Metal Exchange initially jumped 5.5% on Monday to briefly touch $3,492 per tonne, a price last seen in April 2022.

It pulled back slightly by Monday afternoon to land 3.5% higher at $3,381 per tonne. Aluminum has risen around 10% since the conflict began on Feb. 28, though it fell briefly last week alongside most other asset classes amid fears of a global recession.

Emirates Global Aluminium (EGA) and Aluminium Bahrain, two of the Gulf’s largest producers, came under fire from Iranian drones and missiles on Saturday.

EGA said in a statement that its Al Taweelah smelter sustained “significant” damage in the strikes, injuring several people.

“The safety and security of our people is our top priority at all times,” CEO Abdulnasser Bin Kalban said. “We are deeply saddened and are assessing the damage to our facilities.”

‘Shockwaves’ through the global market

Saturday’s attacks only served to darken the outlook for commodity firms in the region, which have faced severe supply disruption over the past month. 

Around 9% of global ​aluminum supply comes from the Gulf, and most firms there have been unable to export the metal beyond the region since Iran effectively closed the Strait of Hormuz. EGA’s damaged smelter produced 1.6 million tons of cast metal in 2025, according to its statement.

“The attacks have sent shockwaves through the global aluminum market, raising the risk of a supply crisis that could reshape the industry,” April Kaye Soriano, aluminum research analyst at S&P Global Energy, told CNBC over email.

She added that, if the damage proves lasting, the market could move away from any temporary softness and begin to reflect expectations of tighter supply and higher prices.

Joyce Li, commodities strategist at Macquarie Group, told CNBC over email that their base case before the attacks assumed a cut to the current running capacity of approximately 20%, which amounts to roughly 800 to 900 kilotons of production loss in 2026.

Li said Macquarie saw this disruption as sufficient to push the global market into a full-year deficit, adding added that they were closely monitoring the “fluid” situation for any changes.

The role of China

Aluminum is an essential material across electronics, transport, and construction, as well as other industries such as solar panels and packaging.

China is the world’s biggest producer of aluminum and tends to keep production constrained at 45.5 million tons per year to reduce emissions and prevent overcapacity. Some analysts believe the country has a role to play in unlocking supply to the wider market.

“If the Chinese…

Aluminium Bahrain, which hosts the world’s largest smelter of the metal, said on Sunday its facility was subjected to an Iranian attack as the U.S.-Israel-led war extended into a second month.

The company, known as Alba, said in a statement that the attack happened on Saturday.

“Alba is assessing the extent of the damage to its facilities and remains focused on maintaining its operational resilience and the safety of its employees,” Alba said.

The company had cut production capacity by 19% of its 1.6 million tons of annual output “as an operational measure to preserve business continuity amid ongoing supply and transit disruptions affecting the Strait of Hormuz,” the company said on March 15.

The production cuts have been adding to fears of a global shortage of the metal. Aluminum prices surged to four-year highs earlier this month before paring some of those gains. They remain 4.3% above their Feb. 27 levels.

While aluminum may be the most abundant metal on earth, it is crucial to the functioning of the world economy. It is an essential material across electronics, transport, and construction, as well as other industries such as solar panels and packaging. 

Iran has been retaliating against U.S. and Israeli attacks that began on Feb. 28 by firing missiles and drones at its regional neighbors.

The United Arab Emirates said on Sunday its air defenses were dealing with the latest salvo of incoming missiles.

On Saturday, Iranian-backed Houthi fighters said they launched a missile strike against Israel, the first time the group has participated in the war.

Analysts have told CNBC that the Houthis could attempt to choke off maritime traffic through the Bab el-Mandeb Strait separating the Arabian Peninsula and the Horn of Africa — through which ships must pass to reach the Red Sea and the Suez Canal — adding to pressure on global trade.

On Saturday, Danish shipping giant Maersk, widely regarded as a barometer of global trade, responded to reports of drone activity and explosions that occurred at the Port of Salalah in Oman.

The Bab el-Mandeb Strait was estimated to account for 12% of seaborne oil trade and 8% of liquefied natural gas trade in the first half of 2023.

Iranian forces have already effectively shut down the Strait of Hormuz between Iran and the Arabian Peninsula, through which about 20% of the world’s oil supplies moved before the war.

Oil prices on Friday closed at their highest level in more than three years, as President Donald Trump’s pivot toward negotiations with Iran failed to ease market fears about the huge supply disruption in the Middle East.

U.S. crude oil prices rose 5.46% to close at $99.64 per barrel. International benchmark Brent crude prices gained 4.22%…

European shares look set to open in mixed territory on Friday, after AI fears triggered another sell-off on Wall Street overnight.

Futures tied to the pan-European Stoxx 50 were 0.1% lower just before 7 a.m. in London (2 a.m. ET), with those tied to the French CAC 40 down 0.2%. German DAX futures were marginally lower, while those tied to London’s FTSE 100 were 0.1% higher.

New York’s major averages all dropped on Thursday, as AI jitters rippled through the market again – hitting real estate, trucking and software stocks particularly hard. The “Magnificent 7” tech stocks each closed in negative territory.

Investors are also digesting another busy week of corporate earnings. In Europe, Friday will be a quieter day on the earnings front, with French aerospace firm Safran and British lender NatWest among those reporting their finances.

Global investors are also awaiting U.S. inflation data, which will be published by the Bureau of Labor Statistics at 8:30 a.m. ET.

Metal markets were subdued on Friday morning, after the Financial Times reported U.S. President Donald Trump had plans to scale back tariffs on steel and aluminum. Aluminum futures in London and the U.S. were 1.2% and 0.6% lower, respectively, while front-month steel futures were down 0.1%.

Elsewhere, international officials are gathering in Munich, Germany, for the Munich Security Conference, which runs through Sunday.