Wall Street futures slip after Trump's steel, aluminum tariff threats
June 2 (Reuters) - U.S. stock index futures dipped on Monday after President Donald Trump announced plans to double tariffs on imported steel and aluminum, amplifying concerns about trade- and tariff-related volatility.
Trump said on late Friday he planned to increase tariffs on imported steel and aluminum to 50% from 25% starting Wednesday, just hours after he accused China of violating an agreement.
The increased levies would deepen Trump's global trade war and douses some enthusiasm stemming from a softening in his trade stance.
Last month, a temporary relief on some levies on China and a rollback of steep tariff threats on the European Union, along with strong earnings and improving economic data helped the benchmark S&P 500 log its best monthly performance in 18 months.
Shares of U.S. Steel companies rose in premarket trading, with Cleveland-Cliffs (CLF.N), opens new tab jumping 26.2%, Nucor (NUE.N), opens new tab up 14.1% and Steel Dynamics (STLD.O), opens new tab 13.4% higher.
"It is really hard to keep up or predict what's going to happen on trade at the moment, and that's before we factor in the full ramifications from the court ruling last Thursday night, and then subsequent brief stay of execution for them on appeal," Jim Reid, global head of macro and thematic research at Deutsche Bank, said in a note.
A federal appeals court on Thursday temporarily reinstated most of Trump's 'Liberation Day' tariffs blocked by the Court of International Trade, the day prior.
"For now, it seems likely that the tariff uncertainty will linger for a long time ahead even if we're still likely past the peak aggressiveness of U.S. policy," Reid said.
At 5:22 a.m. ET, Dow E-minis were down 218 points, or 0.52%, S&P 500 E-minis were down 34 points, or 0.57%. Nasdaq 100 E-minis were down 156.5 points, or 0.73%
Most megacap and growth stocks were down, with Tesla (TSLA.O), opens new tab leading losses after it reported lower monthly sales in Portugal, Denmark and Sweden. The stock was last down 2%.
Focus would be on comments from Fed Chair Jerome Powell later in the day as he presents opening remarks before the Federal Reserve Board International Finance Division's 75th anniversary conference at 1:00 p.m. ET (1700 GMT).
Federal Reserve Governor Christopher Waller said on Monday that interest rate cuts remain possible later this year even with the Trump administration's tariffs likely to push up price pressures temporarily.
On the data front, a reading of S&P Global U.S. manufacturing PMI is due at 9:45 a.m. ET and an ISM Manufacturing index reading is scheduled for 10:00 a.m. ET.
Ahead in the week, investors await a crucial nonfarm-payrolls report due on Friday to ascertain strength in the U.S. economy amid tariff volatility.
Among other stocks, Moderna (MRNA.O), opens new tab rose 4.6% after the U.S. Food and Drug Administration approved its next-generation COVID-19 vaccine for everyone aged 65 and above.
Separately, RBC Capital Markets raised its year-end target for the S&P 500 index (.SPX), opens new tab to 5,730 from 5,550, citing modestly improved U.S. economic outlook and stronger-than-expected corporate earnings.
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