US stock futures saw modest declines on Tuesday as investors braced for important inflation data later in the week.
Dow Jones Industrial Average futures slipped by 80 points, or 0.2%, while S&P 500 futures and Nasdaq 100 futures both fell by 0.3% and 0.4%, respectively.
This market movement comes on the heels of President Donald Trump’s announcement on Monday evening that the US would impose a 25% tariff on steel imports and raise tariffs on aluminum from 10% to 25%. The new tariffs are set to take effect on March 4. The announcement had sparked a rally in steel producer stocks on Monday, but concerns over the broader economic impact of these measures have weighed on market sentiment in recent days.
Market participants are also focusing on upcoming economic reports. The consumer price index (CPI), set to be released on Wednesday, will provide insights into inflation at the consumer level, while the producer price index (PPI) will be published on Thursday, offering a glimpse into wholesale price trends.
Sam Stovall, Chief Investment Strategist at CFRA Research, noted that while the true economic impact of the tariffs may only become apparent in future inflation data, the market is currently expecting a relatively positive inflation report.
“If the tariffs go into effect for a while, disrupt supply chains, and result in increased inflation, then investors are going to worry,” he said.
However, he added that if both the CPI and PPI reports show year-on-year declines in both headline and core readings, the market could find support and continue its gradual upward trajectory.
Investors are also paying close attention to Federal Reserve Chair Jerome Powell, who is scheduled to testify before Congress later today. His comments on the state of the economy and the future path of interest rates could further influence market sentiment.
In earnings news, several companies are reporting quarterly results, including Coca-Cola, Humana, Lyft, and Super Micro Computer. Coca-Cola shares rose 3.2% in premarket trading after the company surpassed Wall Street expectations with its fourth-quarter earnings report.
With input from CNBC, the Wall Street Journal, Bloomberg, Investor’s Business Daily, and the Street.
