Market Volatility: Trump’s Tariff Plans and Interest Rate Uncertainty
Investors on Edge as Trump Considers National Economic Emergency
US stocks experienced a tumultuous Wednesday as investors digested a report that President-elect Donald Trump is considering declaring a national economic emergency to pave the way for proposed tariffs. The S&P 500 and the tech-heavy Nasdaq Composite slipped just below the flatline, while the Dow Jones Industrial Average was little changed. Meanwhile, the 10-year Treasury yield jumped to an eight-month high of 4.72%.
Tariff Fears and Interest Rate Uncertainty
Trump’s plan to use emergency powers to impose hefty and wide-ranging tariffs has investors on high alert. The news comes as markets are already bracing for a wave of policy moves and executive orders ahead of Inauguration Day. Investors are keeping a close eye on prospects for the economy, gauging shifts in the chances of slower interest-rate cuts this year.
Federal Reserve Minutes and Labor Market Data
Federal Reserve minutes due later today could reset investor bets on interest rate cuts. Meanwhile, US private companies slowed their headcount growth in December, signaling moderating demand for hiring. However, the number of Americans making jobless claims fell unexpectedly last week, pointing to a stable labor market.
Nvidia and Moderna Stocks in Focus
Nvidia stock struggled to recover from a rout that erased $220 billion in market value, while Moderna stock saw big swings this week after the first reported bird flu death in the US, which has put its development of a vaccine in focus.
Fed Governor Chris Waller Supports Rate Cuts
Federal Reserve governor Chris Waller said he still supports cutting interest rates this year, believing inflation will continue to drift lower despite promises of sweeping tariffs from the new Trump administration.
Economic Data and Earnings
Today’s economic data releases include MBA mortgage applications, initial jobless claims, and ADP private payrolls for December. Earnings reports are due from Albertsons, Helen of Troy, and Jefferies.
Leave a Reply