Market Talks covering the impact of U.S. Politics and White House policies on companies and markets. Published exclusively on Dow Jones Newswires throughout the day.

2310 ET - The U.S. Treasury's potential use of its cash balance can "buy time, but it cannot buy fiscal credibility," State Street Investment Management's Masahiko Loo says, noting a CNBC report citing two senior officials that the Treasury could use its General Account to fund increased buybacks announced last week. "Buybacks may improve market functioning and temporarily stabilize the [Treasury yield] curve, but they do not reduce the debt burden itself. Nor can they fully offset fiscal concerns, rising AI-driven capital demand, or the longer-term refinancing risks associated with greater reliance on bill issuance," the senior fixed-income strategist adds. (ronnie.harui@wsj.com)

2228 ET - Copper declines in Asia trading. The market for the base metal appears to be increasingly difficult to interpret, given a new set of forces affecting prices, centered on geographic arbitrage and trade policy, say Societe Generale analysts in a note. Limited mine supply and growing demand from sectors such as artificial intelligence have generally supported prices, they note. However, tariff-related arbitrage has redirected large volumes of copper inventories toward the U.S., affecting stockpiles elsewhere and making the market difficult to analyze based on traditional frameworks alone, they add. The three-month copper futures contract on the London Metal Exchange falls 0.3% to $14,225.50 a metric ton. (megan.cheah@wsj.com)

1448 ET - President Trump's fresh threat to double auto tariffs on Canada targets an important pillar of the U.S.-Canada trade relationship, says Olu Sonola, head of U.S. economics at Fitch Ratings. Trump vows on Jan. 1, 2027 to impose a 50% duty on Canadian-made motor vehicles and on previously-exempt auto parts. Canada supplies 13% of total U.S. vehicles and parts, Sonola says. "The uncertainty alone will strain the highly integrated North American auto supply chain," the economist says. She warns that should Trump follow through with his auto threat, the duties "could force a significant and economically disruptive restructuring of Canada's auto industry, with lasting consequences for its manufacturing base and broader economy." (Paul.Vieira@wsj.com, @paulvieira)

1357 ET - Oil futures extend losses as U.S. Treasury Secretary Scott Bessent announces the plan to isolate Iran with sanctions against anyone doing business with the country. Although the sanctions are broader-reaching, much of the attention will be on the implications for Iran's oil exports, David Oxley of Capital Economics says in a note. Depending on whether the sanctions accelerate or delay a resolution to the conflict, they could still have a sizeable impact on the energy landscape, he says. "In practice, though, we suspect that the new package will have only a limited direct impact on Iranian energy flows in the short term" as most oil exports go to China which has not recognized U.S. sanctions in the past, Oxley adds. WTI is down 2.6% at $84.80 a barrel and Brent is down 2.5% at $92.99. (anthony.harrup@wsj.com)

1346 ET - Treasury Secretary Scott Bessent says the department is launching an "economic onslaught" against Iran's global financial connections. Beginning today, actions by the Treasury and other agencies will "tighten the noose" and block every potential source of revenue funding the IRGC, enforcing a "zero leakage" approach. Bessent said new sectoral sanctions target five of Iran's most vital lifelines in other countries: digital assets, technology, gold, aviation and shipping. "I want to emphasize that we are spreading out across the world as we speak...you will see a wave of sanctions when you leave this meeting today, and you should expect that cadence to continue," Bessent said. Markets showed muted initial reaction to the press conference. (jessica.coacci@wsj.com)

1140 ET--Canada's auto-parts makers are some of the hardest hit stocks on the TSX as President Trump threatens 50% tariff on the country's auto sector. Trump is planning to impose 50% tariffs on automobiles and parts from Canada starting in January 2027. The escalation comes after cross-border trade talks collapsed over the weekend after the U.S. added last-minute requests to a nearly completed deal. U.S. tariffs on Canadian automobiles now stand at 25%, with discounts for the U.S. content in cars, while steel tariffs are at 50%. Magna International, the largest auto-parts maker, is down 4%, while Linamar declined by 4.9%. Martinrea International shares are down 6.3%. (adriano.marchese@wsj.com)

1127 ET -- The Canadian dollar is weaker in trading amid an escalation in trade tensions between the U.S. and Canada. However, risks abound in attempts to short CAD, says Brent Donnelly, head of forex-research firm Spectra Markets. "I would not be chasing short CAD here," he says. "The CAD trade features too many crosswinds to make any sense, whether it's vs. GBP, JPY, USD or anything else." He adds CAD hasn't taken a substantial drubbing because forex traders are accustomed to President Trump's on-and-off trade threats. "It's hard for the market to get excited and/or scared of a theme when the theme is 18 months old and the tariff threats go on and off like Delta Wi-Fi." (paul.vieira@wsj.com, @paulvieira)

1100 ET--It would be a mistake to dismiss the impact of the Trump administration's new 50% tariff on $20 billion of Canadian goods, says National Bank of Canada economists. For sure, 80% of Canadian goods will remain exempt from U.S. tariffs. Still, for firms directly affected, National Bank says the new tariff "could simply render their products uncompetitive in the U.S. market ... A prohibitive tariff concentrated in a handful of sectors can trigger a sharp drop in exports, lost market share, factory closures and weaker investment." The economists estimate the average tariff on manufacturers will jump to 10% from the current 6% level. National Bank adds it is paramount that Canadian policymakers tackle domestic factors that thwart growth as a way to soften the tariff blow. (paul.vieira@wsj.com, @paulvieira)

1033 ET - The escalation in U.S.-Canada trade tensions -- with President Trump now threatening 50% tariffs on all Canadian autos and auto parts -- tilts toward the Bank of Canada cutting rates in the months ahead, says Sebastien Mc Mahon, chief economist at IA Financial Group. The new 50% tariff on $20 billion of Canadian goods "are a real downside risks." He expects the BOC at its Sept. 2 decision to keep the policy rate steady at 2.25%, and flag trade tensions as a downside risk to growth. There's no urgency for the BOC to act, given a pickup in growth in 2Q and solid hiring in recent months. "If the trade damage shows up in the hard data this fall, the door to a rate cut stays open," Mc Mahon says. (paul.vieira@wsj.coml @paulvieira)

1024 ET - Heavyweight industrial and export-focused Canadian names are bearing the brunt of a sell-off as markets digest U.S. cross-border supply chain disruption. Among the biggest decliners are manufacturing and auto-parts stocks like Magna International, Linamar and also transformers and electrical equipment manufacturer Hammond Power Solutions, all of which face immediate headwinds under the non-CUSMA content penalties. Aerospace, materials and tech growth plays are also pulling back, including business-jet maker Bombardier, BlackBerry, specialty semiconductor producer 5N Plus and satellite maker MDA Space. Toronto indexes, however, remain flat as gains in mining, metals and financials offset the pressure. (adriano.marchese@wsj.com)

1021 ET - The breakdown in U.S.-Canada trade talks does not bode well for the future of the USMCA trade treaty, which exempts the bulk of U.S.-bound Canadian exports from tariffs, says Bradley Saunders, economist at Capital Economics. Canada PM Mark Carney said this weekend the prospect of an intensified U.S.-Canada trade conflict marked a setback about USMCA. The Trump administration declined in July to renew USMCA for another 16 years, and instead subject the deal to annual reviews for a decade. This increases the risk of U.S. withdrawal from the pact. Saunders says a renewed trade war will delay USMCA talks, "dealing yet more damage to business sentiment and creating fresh challenges for the Bank of Canada as it balances worsening growth and inflation prospects." (paul.vieira@wsj.com; @paulvieira)

0939 ET - The Bank of Canada is likely to be on hold through the rest of 2026 and the first half of 2027 as it assesses the impact from the escalation of trade tensions between Ottawa and Washington, says BofA Securities economist Carlos Capistran. The hit to the Canada GDP might end up being modest, but Capistran says he anticipates sizable damage to business confidence. "Renewed uncertainty is likely to weigh on investment, and potentially hiring, more than the tariffs themselves," Capistran says. Canada's economy had exhibited encouraging signs of life, but America's new 50% tariff, Ottawa's intention to retaliate and elevated uncertainty "are likely to cap the upturn and keep the BOC cautious."