United States stock futures traded higher on Monday evening (Tuesday AEST), buoyed by President Donald Trump’s decision to delay a proposed 50% tariff on European Union goods.
The move, announced over the Memorial Day weekend, helped calm investor nerves after last week’s losses.
As of 8:30 am AEST (10:30 pm GMT), futures for the Dow Jones Industrial Average, S&P 500, and Nasdaq 100 were up 1.1%, 1.2%, and 1.3%, respectively, from Friday’s close.
President Trump said he would extend the deadline for the new tariffs to 9 July. The levy was initially scheduled to take effect on 1 June, raising the import tax on EU goods to 50%.
Economists continue to weigh the inflationary risks. ANZ analysts commented, “We estimate that an increase in the U.S. tariff on EU imports to 50% would add 0.2% to the core PCE over and above our earlier estimate that tariffs will boost the core PCE by 0.3–0.4% this year.
"These estimates assume some offsets from lower exporter prices, a squeezed U.S. component of imported goods prices (marketing, distribution), weaker U.S. demand and some carve-outs.”
Meanwhile, Federal Reserve Bank of Minneapolis President Neel Kashkari, a voting member of the FOMC, told Bloomberg Television that “there's no question the shock of tariffs is stagflationary”.
Major benchmarks posted a weak performance on Wall Street last week, where the Dow, S&P 500, and Nasdaq Composite each fell more than 2%.
U.S. markets were closed on Monday for the Memorial Day public holiday.
Investors will turn their focus to key economic reports due Tuesday, including durable goods orders, housing data, and consumer confidence.
On the corporate front, earnings from Okta are expected after the bell, with reports from Nvidia, Macy’s, and Costco due later in the week.
