Futures Pointing To Mixed Open On Wall Street

The major U.S. index futures are currently pointing to a mixed open on Tuesday, as the Dow futures are down by 0.3 percent but the S&P 500 futures are up by 0.3 percent.

Traders may be reluctant to make significant moves as they digest President-elect Donald Trump’s latest threats to impose increased tariffs on Mexico, Canada and China.

In a post on his social media platform Truth Social, Trump said he would impose a 25 percent tariff on all products from Mexico and Canada on his first day in office, blaming the countries for the influx of illegal immigrants and illicit drugs into the U.S.

“This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!” Trump said.

Trump said in a subsequent post that he would also impose an additional 10 percent tariff on Chinese products, claiming the country has not done enough to stop the “massive amounts of drugs, in particular Fentanyl, being sent into the United States.”

The President-elect’s threats may offset the optimism generated in reaction to news he intends to nominate Scott Bessent as Treasury Secretary. Bessent has previously called for Trump’s planned tariff increases to be implemented gradually.

Traders will also be looking ahead to the release of the minutes of the Federal Reserve’s latest monetary policy meeting later this afternoon.

The minutes of the November meeting, when the Fed decided to lower interest rates by 25 basis points, could shed light on the outlook for rates.

CME Group’s FedWatch Tool is currently indicating a 59.6 chance the Fed will lower rates by another 25 basis points next month but a 40.4 percent chance the central bank will leave rates unchanged.

After showing a strong move to the upside early in the session, stocks gave back some ground over the course of the trading day on Monday but managed to close mostly higher. While the major averages pulled back off their best levels of the day, the Dow still reached a new record closing high.

The Dow closed higher for the fourth consecutive session, jumping 440.06 points or 1.0 percent to 44,736.57. The S&P 500 extended its winning streak to six sessions, climbing 18.03 points or 0.3 percent to 5,987.37, while the Nasdaq rose 51.18 points or 0.3 percent to 19,054.84.

Stocks added to the strong gains posted last week amid a positive reaction to news President-elect Donald Trump intends to nominate billionaire hedge fund manager Scott Bessent as Treasury Secretary.

Bessent is seen as supportive of the equity markets and an advocate for deficit reduction. He has also called for Trump’s planned tariff increases to be implemented gradually, which could reduce the impact on inflation.

“Hedge fund manager Scott Bessent is perceived as being a relatively conventional and safe pair of hands candidate,” said AJ Bell investment director Russ Mould. “Importantly, Bessent is seen as being less aggressive on tariffs than some of the rhetoric espoused by Trump on the campaign trail.”

He added, “A fall in bond yields in response to his unveiling suggests some of the concern about a new wave of inflationary pressures from import tariffs has eased and that Bessent might be able to do something to bring the U.S. deficit under control.”

However, buying interest waned as the day progressed, as traders seemed reluctant to make more significant moves ahead of the release of several key economic reports in the coming days.

A report on personal income and spending in the month of October is likely to be in the spotlight, as it includes the Federal Reserve’s preferred inflation readings.

Housing stocks moved sharply higher amid a steep drop by treasury yields, resulting in a 4.5 percent spike by the Philadelphia Housing Sector Index.

Substantial strength was also visible among computer hardware stocks, with the NYSE Arca Computer Hardware Index soaring by 4.1 percent to a four-month closing high.

Airline stocks also showed a significant move to the upside on the day, driving the NYSE Arca Airline Index up by 2.6 percent.

Commercial real estate, retail and biotechnology stocks also saw considerable strength, while gold stocks plunged along with the price of the precious metal.

Commodity, Currency Markets

Crude oil futures are climbing $0.53 to $69.47 a barrel after plunging $2.30 to $68.94 a barrel on Monday. Meanwhile, after plummeting $93.70 to $2,618.50 an ounce in the previous session, gold futures are rising $14.80 to $2,633.30 an ounce.

On the currency front, the U.S. dollar is trading at 153.29 yen compared to the 154.23 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0508 compared to yesterday’s $1.0495.

Asia

Asian stocks fell broadly on Tuesday after U.S. President-elect Donald Trump said he plans to impose 25 percent tariffs on Mexico and Canada and an additional 10 percent on China on his first day in office, ramping up fears of a renewed trade war.

Neither the United States nor China would win a trade war, the Chinese Embassy in Washington said.

The dollar rallied on Trump’s tariff threat and ahead of the release of Federal Reserve’s preferred measure of inflation, the personal consumption expenditures (PCE) price index, on Wednesday.

Gold was little changed around $2,625 per ounce levels, while oil edged up after a sharp decline in the previous session as Israel said that it had edged closer to a ceasefire agreement with Hezbollah.

Chinese and Hong Kong markets ended largely unchanged amid expectations that Chinese fiscal stimulus will help counter the impact of the tariffs. China is set to hold two top political meetings in December, when authorities could ramp up stimulus.

China’s Shanghai Composite Index slipped 0.1 percent to 3,259.76 and Hong Kong’s Hang Seng index finished marginally higher at 19,159.20 ahead of Chinese industrial profit data and purchasing managers index numbers due this week.

Japanese markets fell sharply, with a stronger yen and tariff concerns keeping investors nervous. The Nikkei 225 Index slumped 0.9 percent to 38,442 ahead of November inflation numbers from the Tokyo region due later in the week.

The broader Topix Index settled 1.0 percent lower at 2,689.55. Tech giants Advantest, Tokyo Electron and Screen Holdings lost 2-4 percent.

Seoul stocks ended lower ahead of a Bank of Korea interest-rate decision on Wednesday. The Kospi dropped 0.6 percent to 2,520.36, snapping a two-day winning streak with bio and financial shares facing significant selling pressure.

Australian markets snapped a three-day winning streak, with energy, financials and material stocks leading losses.

The benchmark S&P/ASX 200 Index fell 0.7 percent to 8,359.40 after hitting a record high in the previous session. The broader All Ordinaries Index closed 0.6 percent lower at 8,612.60.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index closed down 0.6 percent at 13,113.76 ahead of a RBNZ rate decision on Wednesday, with markets expecting a 50-basis point cut to the official cash rate.

Europe

European stocks have declined on Tuesday after U.S. President-elect Donald Trump pledged to impose tariffs on all imports from Mexico, Canada and China on his first day in office, raising fears of a renewed trade war.

French political tensions also weighed on markets after far-right leader Marine Le Pen said on Monday that she could bring down France’s minority government by the end of the year unless changes are made to the country’s budget bill.

Lawmakers from Le Pen’s National Rally party would bring a confidence motion if the bill now being debated in parliament “stays as it is,” she said.

While the U.K.’s FTSE 100 Index is down by 0.2 percent, the French CAC 40 Index and the German DAX Index are both down by 0.3 percent.

German automakers BMW, Mercedes Benz and Volkswagen have shown notable moves to the downside following Trump’s tariff threat.

Irish Continental Group shares have also slumped in London. The maritime transport company reported a 6 percent increase in consolidated group revenue to €521 million for the first ten months of 2024 compared to the previous year.

Meanwhile, energy and communications provider Telecom Plus has rallied after reporting an increase in half-year pre-tax profit and backing its full year outlook.

Halfords has also moved sharply higher. The bicycle and car products retailer has asked for more business support from the government to cope with the cost implications from the recent U.K. budget.

On a light day on the economic front, the British Retail Consortium (BRC) reported that U.K. shop prices dropped at a slower pace in November, signaling that shoppers are set to face rising price pressures.

The shop price index declined 0.6 percent on a yearly basis in November, slower than October’s 0.8 percent decrease.

“November was the first time in 17 months that shop price inflation has been higher than the previous month, albeit remaining overall in negative territory,” BRC Chief Executive Helen Dickinson said.

U.S. Economic News

Standard & Poor’s is scheduled to release its report on home prices in major metropolitan areas in the month of September at 9 am ET.

At 10 am ET, the Conference Board is due to release its report on consumer confidence in the month of November. The consumer confidence index is expected to climb to 112.3 in November after jumping to 108.7 in October.

The Commerce Department is also scheduled to release its report on new home sales in the month of October at 10 am ET. New home sales are expected to pull back to an annual rate of 730,000 in October after surging to a rate of 738,000 in September.

At 1 pm ET, the Treasury Department is due to announce the results of this month’s auction of $70 billion worth of five-year notes.

The Federal Reserve is scheduled to release the minutes of its November 6-7 monetary policy meeting at 2 pm ET.