Market Volatility Ahead: Investors Weigh Trump’s Economic Emergency Declaration
As the clock ticks closer to Donald Trump’s inauguration, investors are on high alert, assessing the potential impact of a national economic emergency declaration on the market. A CNN report suggesting Trump may invoke the International Economic Emergency Powers Act to implement new tariffs has sent U.S. stock index futures tumbling.
Treasury Yields and Trade War Fears Weigh on Equities
At 7:34 a.m., Dow E-minis were down 119 points, or 0.28%, while S&P 500 E-minis fell 26.25 points, or 0.44%, and Nasdaq 100 E-minis dropped 134.5 points, or 0.63%. The upward tick in Treasury yields, with the 10-year bond reaching 4.7%, its highest in eight months, has added to the pressure on riskier stocks.
Economic Data Takes Center Stage
Investors are now focusing on the ADP National Employment Report for December and weekly jobless claims data, both due before markets open. Comments from Fed Governor Christopher Waller will also be closely watched. The data could provide valuable insights into what to expect from Friday’s crucial non-farm payrolls numbers.
Fed Minutes and Monetary Policy Outlook
Minutes from the Fed’s December meeting, due at 2:00 p.m. ET, may shed further light on the central bank’s monetary policy stance this year. Market analysts will be keenly interested in understanding the Fed’s concerns about inflation and whether the December rate cut was a compromise between hawks and doves.
Wall Street’s Main Indexes End Lower
In the previous session, Wall Street’s main indexes ended lower, with the benchmark S&P 500 and the tech-heavy Nasdaq logging their biggest daily declines since the Fed’s December meeting. Markets fell after data reflected a robust labor market and upbeat services activity, causing investors to push back expectations on the Fed’s first rate cut.
Politics and Policy Changes Take Center Stage
Politics is also top of mind for investors, who are anticipating policy changes after Trump’s inauguration later this month. Among top premarket movers, Advanced Micro Devices dropped 2.6% after a brokerage downgrade, while quantum-computing stocks Rigetti Computing, IonQ, and Quantum Computing fell sharply after Nvidia’s Jensen Huang commented on the emerging technology.
Earnings Season Ahead
Quarterly corporate updates are on the horizon, with big banks such as JPMorgan Chase & Co and Wells Fargo expected to kick off the earnings season next week. Markets will be closed on Thursday for a national day of mourning to mark the death of former President Jimmy Carter.
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