The U.S. Escalated The Trade War With Canada And Unveiled More Sanctions Against Iran. Stocks Were Mixed.

Stocks were mixed on Monday as the U.S. escalated its trade war with Canada further and unveiled a sanctions package against Iran and countries doing business with it.

The Dow Jones Industrial Average climbed 0.26%, but the S&P 500 dropped 0..28%. The tech-heavy Nasdaq Composite underperformed, declining 0.76%.

Key technology stocks including Micron, Advanced Micro Devices and Broadcom, led the decline, overshadowing a decrease in Treasury yields. They moved lower after a CNBC report detailed that the Treasury could dip into its $1 trillion General Account (TGA) to help fund its plan to increase buyback of government bonds.

The outlet noted that the TGA will allow the Treasury with a large chest to fund the strategy and influence long-term bond yields.

After yields reached a 19-year high last week, Bessent announced that the Treasury would more than double the size of buybacks.

However, the impact was short-lived, and yields that initially plunged rose back quickly amid renewed concerns about the effectiveness of the operations and the Treasury's firepower.

CNBC noted that using the TGA could change the perception about the Treasury's firepower, which Bessent has built up to almost $1 trillion. Officials did not say how much of the TGA would be used or if the move would be announced.

Elsewhere, U.S. Treasury Secretary Scott Bessent unveiled a plan to impose secondary sanctions on those "enabling" Iran to maintain its economic activity.

Treasury Secretary Scott Bessent said the plan is called "Operation Economic Outcast" and appeared to say China could be reached by the measures.

"We want to make clear here today that no one is above the reach of U.S. sanctions," he said when asked if the measures could impact Chinese banks or the Trump administration would refrain from doing so to preserve relations with China.

"If they facilitate transactions and are part of the ecosystem that turns Iranian oil into money, into repression, they will be targeted," he added. Chinese President Xi Jinping is set to meet with President Donald Trump in September.

Bessent had said earlier on Monday that the plan is the "greatest financial offensive ever marshaled against an adversary."

"The Islamic Republic has subsisted by dressing extortion as security guarantees. It has drawn strength from a calculus that regards Iranian retaliation as certain and American enforcement as negotiable. Under President Trump, that era is over. And those who fear the danger of defying Tehran ought not to discount the cost of testing Washington," Bessent claimed in a social media post.

As for the trade war, President Donald Trump said on Monday that, asides from the tariffs that have gone into effect, more will be imposed on the auto industry next year.

"On January First, 2027, Tariffs on all Cars, Trucks, both large and small, Automotive Parts, and Steel, will be increased to 50%."

"Canada has been ripping off the United States of America for years. Their ridiculously high tariffs on our Farmers and farm products has made life impossible for these great American Patriots, and has long created a 60 Billion Dollar Deficit between our two Countries. Not sustainable, and NOT ANYMORE!" Trump said when announcing the decision. Canadian Prime Minister Mark Carney has vowed to retaliate.