U.S. stock futures climbed on Wednesday as investors awaited key inflation data and assessed the latest twists in President Donald Trump’s tariff policies.
As of 07:25 ET (11:25 GMT), S&P 500 futures were up 43 points (+0.7%), Nasdaq 100 futures gained 176 points (+0.9%), and Dow Jones futures rose 234 points (+0.6%).
Markets React to Tariff Uncertainty
On Tuesday, Wall Street saw a volatile session driven by Trump’s shifting stance on tariffs. The president initially threatened to double import duties on Canadian steel and aluminum in response to Ontario’s 25% levy on electricity exports to the U.S. However, Ontario later withdrew the tax, prompting Trump to backtrack on his threat.
Despite this reversal, equities closed lower as traders remained concerned about the uncertainty surrounding U.S. trade policies and their impact on economic growth. According to J.P. Morgan’s Chief Economist, there is a 40% probability that the U.S. economy will slip into a recession this year.
“Investors are not taking these tariff threats lightly and expect continued market disruptions,” analysts at Vital Knowledge wrote in a client note.
On Wednesday, Trump’s expanded tariffs on steel and aluminum officially took effect, escalating tensions with key trading partners. The European Commission expressed “regret” over the decision, warning that the tariffs would disrupt transatlantic trade and push prices higher.
EU and Global Response to U.S. Tariffs
In response, the European Commission announced a two-step countermeasure plan:
- Retaliatory tariffs reinstated from April 1, affecting €8 billion worth of EU steel and aluminum exports.
- New tariffs on U.S. exports set to take effect next month, targeting over €18 billion in American goods.
“The European Union must act to protect consumers and businesses,” said European Commission President Ursula von der Leyen, emphasizing that these measures are “strong but proportionate.”
China and Japan also voiced concerns, with Beijing pledging to protect its interests and a top Japanese official warning that the tariffs could damage economic ties. Canada, the largest U.S. steel and aluminum supplier, along with allies like Britain and Australia, condemned the move.
Inflation Data in Focus
Investors are now turning their attention to the February Consumer Price Index (CPI) report, set for release on Wednesday.
This inflation reading covers the first full month of Trump’s second term and could provide insight into how his trade policies are influencing price levels. In January 2025, inflation accelerated at the fastest pace since August 2023, raising concerns about the Federal Reserve’s interest rate outlook.
Key expectations for the February CPI:
- Annual CPI: Expected to cool to 2.9% from 3.0%.
- Monthly CPI: Forecast to ease to 0.3% from 0.5%.
With the next Federal Reserve meeting set for March 18-19, this will be one of the last major data points before policymakers decide on interest rates. The Fed previously paused its easing cycle in January, citing uncertainty over inflation and trade policies.
“While the CPI report will shed light on inflation trends, its impact on Fed policy is more limited than usual,” analysts at Wolfe Research noted. “Market focus remains on Washington, tariffs, and their effects on economic growth and consumer spending.”
Intel Shares Jump on Joint Venture Talks
Intel’s stock surged over 8% in premarket trading following reports that TSMC (NYSE:TSM) is pitching a deal to Nvidia (NASDAQ:NVDA), AMD (NASDAQ:AMD), Broadcom (NASDAQ:AVGO), and Qualcomm (NASDAQ:QCOM) to form a joint venture for Intel’s U.S. foundry business.
According to Reuters, the proposal would allow TSMC to operate Intel’s factories while limiting its ownership stake to under 50%, addressing Trump’s concerns over foreign control of U.S. chipmaking. Talks remain in early stages, following previous reports that Intel was exploring a spin-off of its foundry unit.
Oil Prices Recover
Oil prices edged higher on Wednesday, rebounding from multi-year lows amid concerns over U.S. tariffs and slowing global demand.
By 07:40 ET:
- Brent crude rose 0.9% to $70.19 per barrel
- WTI crude climbed 0.9% to $66.87 per barrel
Traders are watching the U.S. inflation data and a monthly report from OPEC for further market signals. While crude has regained some ground, uncertainty over trade disruptions continues to weigh on sentiment.
