NEW YORK (AP) — U.S. stocks are slipping following President Donald Trump’s latest escalation against the United States’ trading partners with tariffs. The S&P 500 was 0.3% lower in early trading Tuesday in the U.S. stock market’s first trading since Trump announced 25% tariffs on all foreign steel and aluminum coming into the country. The Dow Jones Industrial Average was down 114 points, or 0.3%, and the Nasdaq composite was down 0.4%. Federal Reserve Chair Jerome Powell is set to give testimony on Capitol Hill, and the hope is that he will give clues about what the Fed’s plans are with interest rates.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Wall Street is trending lower before the opening bell Tuesday following new tariffs announced by the White House. There are also more corporate earnings arriving ahead of the appearance of Federal Reserve Chair Jerome Powell, who will be giving his semi-annual testimony before Congress.
Futures for the S&P 500 fell 0.5%, while futures for the Dow Jones Industrial Average lost 0.3%. Nasdaq futures retreated 0.5% as well.
Coca-Cola rose 3.4% after the beverage giant posted better-than-expected fourth-quarter sales on strong volumes in the U.S., China and elsewhere. Coke also beat Wall Street profit forecasts.
DuPont climbed 5.6% after the chemical easily beat analysts' sales and profit expectations. The Delaware company said its results were helped by strong demand in its electronics business, which it is spinning off later this year.
Stocks in Asia were mostly down Tuesday, after U.S. President Donald Trump imposed 25% tariffs on all U.S. imports of steel and aluminum.
Hong Kong’s Hang Seng index declined 1.06% to 21,294.86, while the Shanghai Composite dipped 0.12% to 3,318.06. Japan markets were closed for a national holiday. Meanwhile, the S&P/ASX 200 in Australia remained largely unchanged and South Korea’s KOSPI was up 0.71% to 2,539.05.
Early European trading held steady, with France’s CAC 40 up 0.2% and Germany’s DAX gaining 0.3%. Britain’s FTSE 100 was flat.
Trump said over the weekend he would announce 25% tariffs on all steel and aluminum imports, with more import duties to come later in the week.
Fear around tariffs has been at the center of Wall Street’s moves recently, and experts say the market likely has more swings ahead. The price of gold, which often rises when investors are feeling nervous, came back down to $2,909 per ounce on Tuesday after hitting a record $2,930 per ounce on Monday.
But Trump has shown he can be just as quick to pull back on threats, like he did with 25% tariffs he had announced on Canada and Mexico, suggesting they may be merely a negotiating chip rather than a true long-term policy.
Trump has pressed ahead with 10% tariffs on Chinese goods, while China has retaliated by imposing tariffs on U.S. coal and liquefied natural gas products as well as crude oil, agricultural machinery and large-engine cars.
“Beijing’s restraint in targeting only a small sliver of U.S. goods is deemed to be a deliberately less than proportionate response to avert an escalatory tit-for-tat spiral,” said Vishnu Varathan, head of macro research at Mizuho.
“Nonetheless, the reality is that U.S.-China trade tensions are set to structurally ramp-up, even if a negotiated compromise is the endgame for Trump 2.0 tariffs," Varathan added.
In the bond market, the yield on the 10-year Treasury held ticked up to 4.53% from 4.50%. The yield on the two-year Treasury, which more closely tracks expectations for what the Federal Reserve will do with short-term interest rates, held steady at 4.29%.
The Fed cut its main interest rate several times through the end of last year, but traders have been sharply curtailing their expectations for more reductions in 2025, in part because of fears about potentially higher inflation from tariffs. While lower rates can give a boost to the economy and investment prices, they can also give inflation more fuel.
All eyes will be on Fed Chair Powell, who will be offering testimony before Congress later today and tomorrow, where he could give more hints about what the Fed is thinking. In December, Fed officials sent financial markets sharply lower after indicating they may cut rates only twice this year.
In energy trading, benchmark U.S crude added $1.21 to $73.53 a barrel. Brent crude, the international standard, rose $1.33 to $77.20 a barrel.
In currency trading, the U.S. dollar rose to $152.35 against the Japanese yen. The euro held steady at $1.0319.
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Zen Soo And Matt Ott, The Associated Press
