S&P 500, Dow, Nasdaq Set to Open Up; TikTok Ban Fallout; Trump Tariffs; Treasury Yields Fall; Tesla, DJT, Nvidia, More Movers; PPI Inflation Report
U.S. stocks looked set to rise on Tuesday as the market chose to focus on the positives from a report saying Donald Trump may take a more restrained approach to raising tariffs.
The President-elect’s transition team is discussing hiking levies on foreign imports by between 2% and 5% a month in a bid to strengthen their hand in negotiations and lower the odds of a flare-up in inflation, Bloomberg reported late Monday, citing people familiar with the matter.
“A lasting rise in tariffs at such a pace would be hardly trivial, so it is not obvious that this scenario would be all that sanguine,” Deutsche Bank analyst Jim Reid wrote. “However, the market has latched onto the gradual and incremental element rather than the potential endgame.”
Premarket action suggested investors were feeling cheerful about the prospect of gradual tariff hikes. Futures tracking the Dow Jones Industrial Average were up 140 points, or 0.3%. Contracts tied to the Nasdaq 100 jumped 0.7% and S&P 500 futures climbed 0.5%. The benchmark index had notched its largest intraday comeback since September on Monday, as the market set aside its worries about rising bond yields.
The Bureau of Labor Statistics set to publish the hotly anticipated producer price index for December at 8.30 a.m. Eastern Time Tuesday. The inflation data are dropping at a time when investors are fretting that a strong labor market will mean that the Federal Reserve doesn’t have to lower interest rates at all in 2025.
The WSJ Dollar Index, which tracks the buck against a basket of 16 foreign currencies, traded a touch lower, and yields on benchmark 10-year U.S. Treasury notes slid by 2 basis points to 4.769%.
