U.S. markets reversed early losses Monday, the first trading day of the third quarter, despite concerns over trade policies.

"We're in this scenario where the underlying economic drivers of the market look very, very good," said Rick Wedell, CIO of RFG Advisory Group. "And that's all being offset by continuing talk around trade, tensions around tariffs, which are incredibly hard to model. You don't know which sector might get hit, you don't know which sector might be a target."

Over the weekend, tariffs from Canada ー on everything from ketchup to whiskey to maple syrup ー kicked in, and the U.S.'s largest business group criticized the Trump administration for moves it says could spark a global trade war.

The U.S. Chamber of Commerce, which has historically been a supporter of the Republican party and its policies, launched a campaign Monday, presenting a state-by-state analysis of where the impact would be most felt. Texas, for example, could see $3.9 billion worth of exports hit with in-kind tariffs; South Carolina could face $3 billion.

Monday's sell-off comes after weeks of tariff threats and announcements from the White House, aimed both at adversaries like China and allies like Canada and Europe. Canada's parry went into effect on Sunday, and China is expected to start levying a 25 percent tax on soybeans later this week. while Mexico will begin to charge pork imports.

In a statement to Reuters the president of the Chamber of Commerce said, “The administration is threatening to undermine the economic progress it worked so hard to achieve. We should seek free and fair trade, but this is just not the way to do it.”

While the Dow was down nearly 200 points at its lows of the day, it managed to eke out a gain of 34 points. The S&P 500 was up about 0.3 percent.

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