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STRATEGISTS WEIGH TARIFF IMPACT AS PICTURE CHANGES QUICKLY

Investors remain on edge Monday over President Donald Trump's order Saturday to levy tariffs on Mexico, Canada and China, although the picture seems to be changing fast and market strategists mostly view the Trump administration as unlikely to leave any tariffs in place for long.

Already on Monday, Trump said he would pause tariffs on Mexico for a month. Levies on Canada and China were still set to take effect on Tuesday.

That news on Mexico caused U.S. stocks to cut losses, and some strategists say that the Trump administration will not want to cause major harm to the U.S. economy with tariffs.

"The Trump administration would not want to jeopardize US economic growth or risk higher inflation by leaving the tariffs in place for a sustained period, and significant stock market volatility could lead to a change in approach," Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management, wrote in a note.

Michael Wilson and other equity strategists at Morgan Stanley wrote that investors heading into the weekend appeared to be factoring in a "gradual/measured approach on China" and that tariffs on Mexico and Canada would either not be imposed or would be "short-lived."

But they noted that the recent tariff announcement reinforced their preference for services industries, including financials; software; media and entertainment; and consumer services.

To be sure, David Kostin and his team of equity strategists at Goldman Sachs wrote that large tariffs - if kept in place - do pose downside risk to S&P 500 .SPX earnings expectations.

Meanwhile, strategists at Wells Fargo Investment Institute wrote that the tariff announcements will likely "portend an ongoing noisy and confusing backdrop for investors," but they noted that the "latest moves start gradually and focus on countries where (Trump's) strongest leverage and high-priority goals intersect."

They added that investors should remember that "trade policy is unlikely to move in a straight line."

(Caroline Valetkevitch)

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FOR MONDAY'S EARLIER LIVE MARKETS POSTS:

SO GOES JANUARY, SO GOES THE YEAR? - CLICK HERE

MONDAY DATA: PMI RETURNS TO EXPANSION, RESIDENTIAL CONSTRUCTION REBOUNDS - CLICK HERE

NASDAQ SLIDES AS TRUMP LEVIES TARIFFS, AS PROMISED - CLICK HERE

TRADERS CHECK THEIR CHARTS AS THEY BRACE FOR ANOTHER MONDAY MORNING ROUT - CLICK HERE

DRINK UP! TARIFF IMPLICATIONS FOR EUROPE'S BEVERAGE MAKERS - CLICK HERE

WHAT IF THE U.S. REAL TARGET IS JUST CHINA? - CLICK HERE

MEANWHILE, EARNINGS REMAIN REASSURINGLY CALM - CLICK HERE

SOME SIMULATIONS ON POSSIBLE FOREX MOVES - CLICK HERE

TRUMP TARIFFS SEND STOXX LOWER; AUTOS SECTOR LAGS - CLICK HERE

EUROPE BEFORE THE BELL: TRADE WAR UNDERWAY - CLICK HERE

TRUMP TARIFF REALITY UNNERVES MARKETS - CLICK HERE