Investing.com– U.S. stock index futures traded largely flat Tuesday, struggling to register further gains after President-elect Donald Trump threatened to impose higher import tariffs on China, Canada and Mexico.
At 05:55 ET (10:55 GMT), rose 5 points, or less than 0.1%, gained 4 points, or 0.1%, and climbed 13 points, or 0.1%.
US stock benchmarks hit record highs on Monday as investors cheered the nomination of Scott Bessent as Treasury Secretary, while flows into cyclical sectors persisted.
The was the outperformer among its peers, rising 1% to a record high of 44,746.57 points, while both the and the gained 0.3%.
Risk appetite was also supported by reports that a ceasefire between Israel and Lebanon was close, which saw oil prices fall sharply.
Trump threatens more tariffs
Trump said in a social media post on Monday that he will impose a 25% tariff on all imports from Canada and Mexico, citing the inflows of allegedly illegal immigrants and drugs into the US through open borders with the two countries.
He added that he will impose an additional 10% tariff on all Chinese imports, citing a lack of progress on China’s part towards curbing the flow of illegal drugs into the U.S.
His threat follows promises during his campaign that he will impose a 60% tariff on all Chinese goods.
Trump’s tariff threats ramped up concerns over a renewed global trade war between the world’s biggest economies – a trend seen through much of his first term. Such a scenario bodes poorly for global trade, especially for countries with heavy trade exposure to the US.
Earnings due from retailers
Trading volumes are expected to be muted this week, on account of Thursday’s Thanksgiving holiday.
Ahead of that, corporate earnings are scheduled from the likes of Best Buy, Urban Outfitters and HP (NYSE:), while Kohl’s (NYSE:) is also due to release numbers the day after the retailer announced its CEO Tom Kinsbury would step down in January, to be replaced by Ashley Buchanan, who currently leads crafts store owner The Michaels Companies (NASDAQ:).
Additionally, the U.S. Commerce Department said Tuesday it was finalizing a $7.86 billion government subsidy for Intel (NASDAQ:), down from the $8.5 billion announced in March after the California-based chips maker won a separate $3 billion award from the Pentagon.
Crude bounces
Crude prices rose Tuesday, bouncing after the previous session’s hefty losses as investors took stock of a potential ceasefire between Israel and Lebanon’s Hezbollah.
By 05:55 ET, the futures (WTI) gained 0.9% to $69.54 a barrel, while the contract rose 0.8% to $73.06 a barrel.
Both contracts dropped around 2% on Monday after multiple reports that Israel and Lebanon had agreed to the terms of a deal to end the Israel-Hezbollah conflict, weighing on oil’s risk premium.
(Ambar Warrick contributed to this article.)
But focus is also on key upcoming economic data, with data- the Federal Reserve’s preferred inflation gauge- due on Wednesday.
Futures reversed initial gains after Trump’s threat, which cut short momentum from a positive session on Wall Street.
