The major U.S. index futures on the Dow Jones, S&P and Nasdaq are currently pointing to a sharply lower open on Wednesday, with stocks likely to give back ground after ending yesterday’s volatile session mostly higher.
The downward momentum on Wall Street comes amid concerns about the impact of President Donald Trump’s reciprocal tariffs on U.S. trade partners.
Trump is scheduled to announce the new tariffs in a Rose Garden event shortly after the close of trading, with White House press secretary Karoline Leavitt indicating the new levies will be “effective immediately.”
A report from Bloomberg said Trump’s team is still finalizing the level and scope of the new import taxes he is slated to unveil.
Citing people familiar with the ongoing discussions, Bloomberg said the White House has not reached a firm decision on their tariff plan and continued to hash out their options in meetings on Tuesday.
The futures remained firmly negative even after payroll processor ADP released a report showing private sector employment in the U.S. increased by more than expected in the month of March.
After recovering from an early move to the downside and moving mostly higher in morning trading on Tuesday, stocks showed a lack of direction over the remainder of the session. The major averages spent the day swinging back and forth across the unchanged line.
The tech-heavy Nasdaq eventually ended the day firmly positive, jumping 150.60 points or 0.9 percent to 17,449.89. The S&P 500 also climbed 21.22 points or 0.4 percent to 5,633.07, but the narrower Dow edged down 11.80 points or less than a tenth of a percent to 41,989.96.
The volatility on the day came as traders continue to express uncertainty about Trump’s trade policies ahead of the announcement of reciprocal tariffs on Wednesday.
A report from the Washington Post said White House aides have drafted a proposal to impose tariffs of around 20 percent on most imports to the U.S.
However, the Washington Post noted White House advisers cautioned that several options are on the table and no final decision has been made.
The higher close on the day may have reflected bargain hunting following recent weakness on Wall Street, which saw the Nasdaq and S&P 500 hit six-month intraday lows on Monday before regaining ground.
While the S&P 500 managed to reach positive territory, the Nasdaq ended the day at its lowest closing level since early last September.
In U.S. economic news, a report from the Institute for Supply Management showed activity in the U.S. manufacturing sector contracted in March after two consecutive months of expansion.
The ISM said its manufacturing PMI dipped to 49.0 in March from 50.3 in February, with a reading below 50 indicating contraction. Economists had expected the index to edge down to 49.5.
Despite the higher close by the broader markets, biotechnology stocks pulled back sharply after surging on Monday, resulting in a 3.2 percent plunge by the NYSE Arca Biotechnology Index.
Pharmaceutical stocks also showed a significant move to the downside, dragging the NYSE Arca Pharmaceutical Index down by 2.8 percent.
Healthcare and airline stock also saw considerable weakness on the day, while software stocks turned in a strong performance, contributing to the advance by the Nasdaq.
Dow Jones, S&P, Nasdaq, Looming Tariff Announcement May Weigh On Wall Street
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