U.S. stock index futures drifted lower Tuesday amid caution as investors awaited more news surrounding President Donald Trump’s trade tariffs and the trajectory of the U.S. economy, News.az reports citing Investing.
At 05:40 ET (09:40 GMT), fell 160 points, or 0.4%, dropped 22 points, or 0.4%, and slipped 70 points lower, or 0.3%.
The main indices ended higher on Monday, although risk appetite was somewhat dented by worries over renewed trade strife between the U.S. and China.
The broad-based rose 0.4%, the tech-heavy gained 0.7% and the blue chip rose just 0.1%.
Trade tariffs, tax bill progress in focus
Markets remained largely on edge given the uncertainty over the Trump administration’s trade policies, with the president stating said over the weekend that he will hike tariffs on steel and aluminum imports to 50% from 25%.
The prospect of higher tariffs has increased concerns of elevated inflation in the coming months.
Trump’s tariff threat also came amid signs of strain between Washington and Beijing, as China denied that it had violated a trade agreement and vowed to safeguard its interests.
The Trump administration is urging countries to provide their best offers for trade negotiations by Wednesday, according to Reuters.
With a self-imposed 90-day pause to Trump’s sweeping reciprocal tariffs on a host of nations due to expire in July, the White House is racing to secure a bevy of bespoke agreements. Several officials from the Trump administration have suggested that several agreements are close to being secured, although so far the only major deal announced has been with Britain.
Focus was also on the progress of a major tax cut and spending bill through Congress. Trump claimed that the bill is the “single biggest spending cut in history,” amid growing concerns that the bill will widen the fiscal deficit and also ramp up already stretched government debt levels.
Jobs opening data due
Investors are also keen for clues of the impact this trade uncertainty has had on the U.S, economy, with the latest Job Openings and Labor Turnover Survey due later in the session, ahead of Friday’s key official report.
Economists expect , a proxy for labor demand, to have edged down slightly to 7.110 million in April. The reading stood at 7.192 million in March.
Elsewhere, auto sales data for May is also due out. Analysts flagged that the number has been bolstered in recent months by car buyers snapping up vehicles prior to the implementation of Trump’s tariffs. Investors will be curious to see if this demand has weakened.
The overall economy has shown signs of broad resilience in the face of the tariff turmoil. Still, the Organisation for Economic Co-operation and Development said that it had trimmed its outlook for U.S. growth to 1.6% this year, down from a prior projection of 2.2%.
U.S. equity flows positive
In the corporate sector, quarterly earnings are expected from the likes of Dollar General (NYSE:), Signet Jewelers (F:) and Nio (NYSE:) before the opening bell, as the results season draws to a close.
U.S. equity flows turned positive last week, with Bank of America clients buying $2.3 billion worth of stocks following net selling the week prior.
The bank said the buying was driven largely by individual stocks, while equity exchange-traded funds posted outflows.
In terms of sector flows, investors favored cyclical over defensive names, with inflows led by Financials, Consumer Discretionary, and Industrials. By contrast, Technology stocks saw the largest outflows for the third week running, with institutions, hedge funds, and retail clients all reducing exposure.
Crude edges higher
Oil prices edged higher Tuesday, extending the prior session’s sharp gains as uncertainty over a U.S.-Iran nuclear deal and worsening tensions between Ukraine and Russia heralded more potential supply disruptions.
At 05:40 ET, Brent futures climbed 0.4% to $64.83 a barrel, and U.S. West Texas Intermediate crude futures rose 0.4% to $62.79 a barrel.
Iran is expected to reject a U.S. proposal to end a decades-old nuclear dispute, meaning continued sanctions, which would limit Iranian supply and be supportive of oil prices.
Both contracts gained nearly 3% in the previous session after the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, agreed to keep output increases in July at 411,000 barrels per day, which was less than some in the market had feared and the same hike as the previous two months.
News.Az
