US stocks slipped on Wednesday as investors absorbed a report that President-elect Donald Trump is considering declaring a national economic emergency to pave the way for proposed tariffs.
The S&P 500 (^GSPC) fell 0.2% while the tech-heavy Nasdaq Composite (^IXIC) fell 0.2%. The Dow Jones Industrial Average (^DJI) dropped more than 100 points, or nearly 0.3%.
Meanwhile, the 10-year Treasury yield (^TNX) jumped as high as 4.72% to hold near an eight-month highs.
Trump is looking to the emergency powers to provide a legal basis for his proposed hefty and wide-ranging tariffs, CNN reported. The news jolted markets already on guard for Trump economic surprises as Inauguration Day nears, bracing for a wave of policy moves and executive orders.
Investors are keeping a close eye on prospects for the economy as they gauge shifts in the chances of slower interest-rate cuts this year. Federal Reserve minutes due later could reset their bets.
Markets could switch back to viewing strong economic data releases as negative and a spur to “higher for longer” rates, some analysts believe.
US private companies slowed their headcount growth in December, signaling moderating demand for hiring. According to ADP Research Institute data, private firms added 122,000 jobs in December, the lowest amount since August.
But the number of Americans making jobless claims fell unexpectedly last week, pointing to a stable labor market, official figures showed. The data was released a day early as government offices are closed for a national day of mourning for former President Jimmy Carter on Thursday.
That labor data, along with the release of Fed minutes on Wednesday afternoon, will feed into expectations for the crucial December jobs report release on Friday.
Meanwhile, Nvidia (NVDA) stock nudged higher as it struggled to recover from a rout that erased $220 billion in market value.
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Walmart CEO Doug McMillon meets with Trump ahead of inauguration
Walmart (WMT) CEO Doug McMillon sat down with President-elect Donald Trump on Tuesday, sources told Yahoo Finance.
The one-on-one meeting at Trump’s Mar-a-Lago estate comes less than two weeks before he takes office for the second time.
“Doug enjoyed reconnecting with President Trump on a range of topics,” a Walmart spokesperson told Yahoo Finance, adding that it was a “great conversation.”
McMillon previously served on one of Trump’s advisory council before it was disbanded in August 2017, then on a special task force in response to the COVID-19 pandemic in April 2020.
The possibility of tariffs remain a top issue for Walmart ahead of President-elect Trump’s second term.
Trump has floated a range of new tariffs, such as 10% tariff on all imports and 60% on Chinese imports to cut the trade deficit.
Potential tariffs could hit the chain’s profit due to elevated costs. The retailer might have pass along that cost to consumers who are healthy, but price sensitive heading into 2025.
“I believe that inflation will continue to make progress toward our 2% goal over the medium term and that further reductions will be appropriate,” Waller said during a speech in Paris.
While Waller underscored that tariff proposals raise the possibility of a “new source of upward pressure on inflation,” he noted projections of their economic impact vary widely.
The stock jumped over 10% on Tuesday before reversing course and losing over 5% early Wednesday.
In July 2024, Moderna was awarded $176 million from the US government to advance the development of its mRNA H5N1 (bird flu) vaccine, which is in the early stages of testing. The award came after an outbreak of the virus in cows infected three dairy workers, prompting concerns of an outbreak in humans.
Stocks wobble as tariff possibilities put markets on edge
Stocks wobbled at the open on Wednesday as investors assessed a news report that President-elect Donald Trump is considering declaring a national economic emergency.
The S&P 500 (^GSPC) was little changed, while the tech-heavy Nasdaq Composite (^IXIC) fell to just below the flat line. The Dow Jones Industrial Average (^DJI) was also broadly flat, after volatile premarket trading.
Investors are on edge over the prospect of slower interest rate cuts this year if inflation remains sticky.
Meanwhile, Federal Reserve governor Chris Waller said he still supports cutting interest rates this year. He believes inflation will continue to drift lower, despite promises of sweeping tariffs from the new Trump administration.
A CNN report on Wednesday morning said Trump is looking to the emergency powers to provide a legal basis for his proposed hefty and wide-ranging tariffs.
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Trump tariff bluster continues to push around markets
Another day, another report suggesting President-elect Donald Trump will look for creative solutions to impose broad tariffs on America’s trading partners.
CNN’s Kayla Tausche reported early Wednesday that Trump “is considering declaring a national economic emergency to provide legal justification for a large swath of universal tariffs on allies and adversaries.”
Following the report, stock futures pared gains and traded into negative territory.
About an hour before the market open, futures were little changed.
Wednesday’s market reaction is the inverse of what investors saw Monday when a report from the Washington Post suggested Trump may look to narrow the scope of his tariff proposals. After markets cheered that story, the president-elect denied it.
But the back-and-forth seen in the major stock indexes on Trump’s tariff bluster continues to play second fiddle to the most important factor for investors right now: the Federal Reserve.
Inflation data inside the ISM’s latest manufacturing PMI report, coupled with job openings data that showed an uptick in labor demand during November, saw markets price out another 0.25% rate cut from the Fedin 2025.
In turn, the Nasdaq fell almost 2% with stalwarts like Nvidia (NVDA) losing 6% after reaching an all-time high earlier in the session.
As Trump’s inauguration approaches, investors and newshounds will see many echoes of the run-up to his 2017 inauguration in recent newsflow — everything is on the table: renaming bodies of water, annexing Greenland, and so on.
Because markets don’t jump to price in the maximum risk posed by every Trump proposal doesn’t mean they don’t matter.
But the Fed meets times a year to vote on monetary policy, and interest rates are the most important driver of stock prices over the long term.
