(Bloomberg) — US stocks were set to open weaker and Treasuries traded at one-month highs in the hours before President Donald Trump’s tariffs reveal, as speculation swirled over the details of the proposed trade action.
S&P 500 futures dropped 1% while contracts on the Nasdaq 100 fell 1.3%. The yield on 10-year Treasuries slipped four basis points. Bloomberg’s dollar index retreated 0.2%, while gold was just short of its recent record.
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Data showed hiring at US companies picked up more than forecast last month, coming in at 155,000, according to ADP Research.
Traders are now on high alert for Trump’s tariff plans that are due to be revealed in the White House Rose Garden just as US markets close at 4 p.m. Several proposals are said to be under consideration, including a tiered tariff system with a set of flat rates for countries, as well as a more customized reciprocal plan. The White House has said the tariffs would take immediate effect, but that Trump was open to subsequent negotiation.
Uncertainty over the levies has fueled volatile swings on Wall Street this week, as traders fear that lengthy and potentially fractious negotiations with trade partners will weigh on economic growth and pressure companies’ profits.
“There isn’t anywhere to purely hide, because of the huge uncertainty that is in the market at the moment,” said Helen Jewell, chief investment officer of fundamental equities EMEA at BlackRock Inc.
Jewell does not expect the confusion to dissipate after Trump’s announcement. “It is very much the opposite,” she said. “It just keeps that risk in the market and it kicks that risk can down the road.”
Among premarket US stock movers, Tesla Inc. shed more than 2%, ahead of data that’s forecast to show a sharp slowdown in the EV maker’s sales. Other tech names such as Palantir Technologies Inc., Meta Platforms Inc. and Nvidia Corp. slipped. Airline shares also slid on fears of waning travel demand, with Raymond James downgrading United Airlines Holdings Inc.
Europe’s Stoxx 600 Index fell 1.2%, with healthcare stocks losing ground as mass layoffs at the US Department of Health sowed uncertainty over the outlook for vaccines and gene therapies.
Meanwhile, there were further signs that other countries are gearing up to retaliate against the US. China has taken steps to restrict local companies from investing in the US, people familiar with the matter said. On Tuesday, the European Commission vowed to retaliate against US tariff moves.
“Perhaps the most important question is whether this announcement will tip the scales toward a global recession,” said Oliver Blackbourn, portfolio manager at Janus Henderson Investors.
The impact of US tariffs is also a hot topic of conversation among central bankers. Tariffs may raise both inflation and unemployment, Federal Reserve Bank of Richmond President Tom Barkin said. His Chicago Fed counterpart Austan Goolsbee said one-time tariffs should have a transitory impact on prices, but if consumers and businesses stop spending and investing, “that would be a bit of a mess.”
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Some of the main moves in markets:
Stocks
- S&P 500 futures fell 0.9% as of 8:22 a.m. New York time
- Nasdaq 100 futures fell 1.1%
- Futures on the Dow Jones Industrial Average fell 0.6%
- The Stoxx Europe 600 fell 1.1%
- The MSCI World Index fell 0.2%
Currencies
- The Bloomberg Dollar Spot Index fell 0.1%
- The euro rose 0.1% to $1.0804
- The British pound rose 0.2% to $1.2947
- The Japanese yen rose 0.2% to 149.27 per dollar
Cryptocurrencies
- Bitcoin fell 0.6% to $84,772.21
- Ether fell 2.6% to $1,863.55
Bonds
- The yield on 10-year Treasuries declined three basis points to 4.14%
- Germany’s 10-year yield declined two basis points to 2.66%
- Britain’s 10-year yield declined two basis points to 4.61%
Commodities
- West Texas Intermediate crude fell 0.5% to $70.87 a barrel
- Spot gold rose 0.2% to $3,120.19 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Anand Krishnamoorthy.
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