(Reuters) – Futures for U.S. stock indexes remained unchanged on Tuesday after a downturn on Wall Street the day before, which followed President Donald Trump’s decision to impose tariffs on trade allies, potentially escalating a global trade conflict that could hinder economic growth. At 5:32 a.m. ET, Dow E-minis were down 44 points, or 0.10%, S&P 500 E-minis were down 5.75 points, or 0.11%, and Nasdaq 100 E-minis were up 2.5 points, or 0.01%. The CBOE market volatility index rose 0.35 points after hitting a two-month high at 24.31 in the previous session. The S&P 500 saw its biggest single-day decline since mid-December, while the Nasdaq closed nearly 9% lower than its all-time peak on Monday, following the U.S. decision to apply 25% tariffs on imports from Mexico and Canada and double duties on Chinese products to 20%. The potential trade standoff between nations could disrupt nearly $2.2 trillion in annual two-way trade.
In response, China announced additional tariffs of 10%-15% on certain U.S. imports, while Canada pledged immediate 25% tariffs. Automakers Ford and General Motors, with extensive supply chains across North America, saw stable premarket trading after significant losses the previous day. Illumina experienced a 2.8% drop after China banned imports of genetic sequencers from the company shortly after Trump’s tariff declaration. U.S.-listed shares of Chinese firms Bilibili and Netease rebounded by around 3.7% each, recovering from losses on Monday.
Investors are anticipating that the tariffs will drive up inflation, reduce demand, and erode corporate profits at a time when recent data has reignited concerns of a slowing economy. Futures tracking the domestically focused small-cap Russell 2000 index decreased by 0.4%. “Despite some market participants viewing Trump’s tariff rhetoric as a negotiating tactic, recent events indicate his commitment to his ‘America First’ agenda, disregarding the impact on the global economy,” noted Achilleas Georgolopoulos, senior market analyst at brokerage XM.
Business leaders are postponing investments and spending as they await further clarity on Trump’s forthcoming policies. Analysts suggest that April 1 could mark the announcement of the president’s comprehensive global trade strategy. Interest rate futures suggest that the Federal Reserve may implement at least three 25 basis points interest rate cuts by December, up from around two on Monday, as traders predict that sluggish growth may prompt the central bank to reduce borrowing costs. Later in the day, statements by New York Fed President John Williams will be closely examined for insights into the central bank’s monetary policy stance.
U.S. shares of gold mining companies such as Harmony Gold Mining rose by 1.7
