U.S. stock futures fell on Wednesday as investors digested a report that President-elect Donald Trump is considering declaring a national economic emergency to clear the way for proposed tariffs.
The tech-heavy S&P 500 (ES=F) and Nasdaq 100 (NQ=F) futures each lost about 0.3%, reversing premarket gains. Dow Jones Industrial Average futures (YM=F) fell 0.2%.
Meanwhile, the 10-year Treasury yield (^TNX) jumped to around 4.72% to stay near eight-month highs.
Trump is turning to emergency powers to provide a legal basis for his proposed high and wide-ranging tariffs, CNN reported. The news jolted markets already on guard for Trump’s economic surprises as Inauguration Day approaches, bracing for a wave of policy actions and executive orders.
Investors are closely monitoring the outlook for the economy as they assess changes in the chances of slower interest rate cuts this year. New employment data and Federal Reserve minutes due later could reset their bets.
Stocks sold off and benchmark Treasury yields soared on Tuesday as service sector and labor market readings revived concerns about persistent inflation. The data lends weight to Fed officials’ hints that they will lower rates more slowly than expected, with traders now seeing a less than 50% chance of any easing before June, according to the CME FedWatch tool.
Some analysts believe markets could once again view strong economic data releases and a stimulus to keep rates “higher for longer” as negative.
An ADP update on private payrolls in December and minutes from the latest meeting of Fed policymakers will be released later Wednesday. The data will fuel expectations for the crucial release of the December jobs report on Friday.
Meanwhile, Nvidia (NVDA) stock rose as it struggled to recover from a decline that erased $220 billion in market value.
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