The major U.S. index futures are currently pointing to a lower open on Tuesday, with stocks likely to move back to the downside after turning in a strong performance in the previous session.
Lingering concerns about a global trade war may weigh on Wall Street after President Donald Trump officially announced tariffs on U.S. steel and aluminum imports.
A statement from the White House said Trump is reinstating a 25 percent tariff on steel imports and increasing tariffs on aluminum imports to 25 percent.
Early trading is also likely to be impacted by reaction to congressional testimony by Federal Reserve Chair Jerome Powell.
Powell is due to appear before the Senate Banking Committee this morning, with his remarks potentially impacting the outlook for interest rates.
Overall trading activity may be somewhat subdued, however, as traders look ahead to the release of closely watched inflation reports in the coming days.
After moving mostly higher early in the session, stocks continue to turn in a strong performance throughout the trading day on Monday. With the upward move, the major averages partly offset the steep losses posted last Friday.
The major averages moved roughly sideways in afternoon trading, hovering in positive territory. The Nasdaq jumped 190.87 points or 1.0 percent to 19,714.27, the S&P 500 climbed 40.45 points or 0.7 percent to 6,066.44 and the Dow rose 167.01 points or 0.4 percent to 44,470.41.
The rebound on Wall Street may partly have reflected bargain hunting, as traders picked up stocks at somewhat reduced levels following the sharp pullback seen last Friday.
While Friday’s slump partly reflected new tariff threats from President Donald Trump, traders largely shrugged off his latest threat to impose a 25 percent tariff on all steel and aluminum imports into the U.S.
The latest tariff threat comes after Trump said last Friday he plans to announce reciprocal tariffs on many countries this week, with the U.S. imposing tariffs on imports equal to the rates imposed on American exports.
“Perhaps investors have decided not to react every time Donald Trump yanks the steering wheel in another direction for fear of getting whiplash, or perhaps they’ve simply remembered how to operate in a world where volatility is baked in,” said AJ Bell head of financial analysis Danni Hewson.
Meanwhile, amid a light day on the U.S. economic front, traders were also looking ahead to the release of several key reports in the coming days.
Reports on consumer and producer inflation are likely to be in focus, while reports on retail sales and industrial production may also attract attention.
Computer hardware stocks moved sharply higher over the course of the session, driving the NYSE Arca Computer Hardware Index up by 4.6 percent to its best closing level in almost seven months.
Super Micro Computer (NASDAQ:SMCI) helped lead the sector higher, soaring by 17.6 percent ahead of fiscal second quarter business update after the close of trading on Tuesday.
Steel stocks also saw significant strength in reaction to Trump’s tariff threat, resulting in a 3.3 percent surge by the NYSE Arca Steel Index.
Gold stocks also saw substantial strength amid a sharp increase by the price of the precious metal, with the NYSE Arca Gold Bugs Index surging by 2.8 percent.
Oil producer, telecom and natural gas stocks also saw considerable strength on the day, while financial and biotechnology stocks bucked the uptrend.
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