US stock futures fell on Wednesday as investors digested a report President-elect Donald Trump is considering declaring a national economic emergency to pave the way for the proposed tariffs.
S&P 500 (ES=F) and tech-heavy Nasdaq 100 (NQ=F) futures fell nearly 0.3%, reversing earlier 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 remain near eight-month highs.
Trump is looking to emergency powers to provide a legal basis for his proposed massive and wide-ranging tariffs. CNN reported. This news shook markets that were already anticipating Trump’s economic surprises as Inauguration Day approached, preparing for a wave of political moves and executive orders.
Investors are closely monitoring the outlook for the economy as they gauge shifts in the chances of slowing interest rate cuts this year. New jobs data and Federal Reserve meeting minutes scheduled to be released later could reset their bets.
Stocks were sold off and the benchmark Treasury yield rose on Tuesday as service sector and labor market readings renewed concerns about stubborn inflation. The data lends weight to Fed officials’ hints that they will cut interest rates more slowly than expected, and traders now see less than a 50% chance of any easing before June. According to CME FedWatch.
Some analysts believe markets could once again view strong economic data releases as negative and spur “higher for longer” interest rates.
The ADP is scheduled to update on special payrolls in December and minutes from the latest Fed policymakers meeting later on Wednesday. The data will feed into expectations for the crucial December jobs report, which will be released on Friday.
Meanwhile, Nvidia (NVDA) stock rose as it struggled to recover from a rout that wiped $220 billion off its market value.
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Live stock market coverage for Wednesday, January 8, 2025.
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