U.S. stock index futures rose on Sunday evening, benefiting from some dip buying after President Donald Trump announced plans to impose more trade tariffs on steel and aluminum imports.
Gains were constrained by caution before key inflation data due this week.
Futures initially traded negative on Trump’s tariff comments, but pared a bulk of their losses, on hopes that the President would wield tariffs more as a negotiating tactic.
Wall Street also benefited from some dip-buying after clocking steep falls on Friday, as Trump flagged plans to impose tariffs on U.S. imports to match levies from U.S. trading partners on goods imported from America. Trump reiterated these plans on Sunday.
S&P 500 Futures rose 0.3% to 6,064.25 points, while Nasdaq 100 Futures rose 0.4% to 21,668.25 points by 19:34 ET (00:54 GMT). Dow Jones Futures rose 0.1% to 44,481.0 points.
Trump announces 25% tariffs on steel, aluminum
Trump on Sunday said he would announce 25% tariffs on all steel and aluminum imports to the U.S. on Monday, just days after his 10% tariffs on China took effect.
The tariffs will be in addition to already existing duties on steel and aluminum, which Trump had imposed during his first term and were retained by the Biden administration, albeit at a less severe scale.
The move stands to impact imports from Canada, Brazil, and Mexico the most, given that the three are the biggest steel exporters to the U.S.
Canada is also by far the largest exporter of aluminum to the U.S.
Still, investors were hoping that Trump would offer some relief to Mexico and Canada, given that he had last week postponed plans to impose 25% tariffs on the two, given their major role in the U.S. supply chain.
Trump had offered tariff exemption quotas to several U.S. allies during his previous term.
Trump on Sunday also reiterated plans to impose reciprocal tariffs on major U.S. trading allies to offset what he has in the past described as unfair trading practices.
Trump had initially flagged plans for reciprocal plans on Friday, which sparked deep losses on Wall Street.
The S&P 500 fell nearly 1% to 6,025.99 points, while the NASDAQ Composite fell 1.4% to 19,523.40 points on Friday. The Dow Jones Industrial Average sank 1% to 44,303.40 points.
Inflation, earnings on tap this week
Analysts and Federal Reserve officials have warned that Trump’s tariffs- which will be borne by U.S. importers- could also underpin inflation in the coming months.
To that end, the focus this week is squarely on key U.S. consumer price index inflation data for January, due on Wednesday. The reading is widely expected to show U.S. inflation remained sticky in the past month.
Sticky inflation gives the Fed less impetus to cut interest rates- a trend highlighted by the central bank in January when it kept interest rates unchanged.
Beyond this week’s inflation print, earnings from several Wall Street majors are on tap.
McDonald’s Corporation (NYSE: MCD), Vertex Pharmaceuticals Inc (NASDAQ: VRTX), Coca-Cola Co (NYSE: KO), and S&P Global Inc (NYSE: SPGI) are set to report in the coming days.
