United States stock futures declined on Sunday evening (Monday AEST) after President Donald Trump announced new 30% tariffs on imports from the European Union and Mexico, a move that heightened trade tensions just as markets prepare for the upcoming second-quarter earnings season and key inflation data.
By 9:30 am AEST (11:30 pm GMT), Dow Jones Industrial Average futures were down 0.6%, while S&P 500 futures dropped 0.3% and Nasdaq 100 futures fell 0.2%.
The announcement adds a fresh layer of uncertainty ahead of this week’s inflation figures, which investors will scrutinise to assess how the current tariff regime is impacting prices across the economy.
In a note to clients, ANZ analysts wrote: "In the U.S., the likelihood of a Fed cut in July diminished after the last release of nonfarm payrolls data came in stronger than expected, and the minutes from the June FOMC meeting suggested that most members still prefer a wait-and-see approach as the inflationary impacts of tariffs unfold."
"A July Fed cut remains a possible, albeit an unlikely, scenario if the June CPI data surprise to the downside and little evidence emerges of tariffs affecting prices data."
Sunday’s decline follows a losing week for major U.S. indices. The S&P 500 ended down 0.3%, marking its first weekly loss in three weeks, while the Dow Jones Industrial Average fell 1%, snapping a three-week winning streak. The Nasdaq Composite edged down 0.1%, also ending a three-week run of gains.
Investors are now turning their attention to the second-quarter earnings season, which kicks off this week with reports from several major banks and corporations.
JPMorgan Chase, Wells Fargo, and Citigroup are all scheduled to report during Tuesday's U.S. session.
Johnson & Johnson, Bank of America, Goldman Sachs, Morgan Stanley, and United Airlines will follow on Wednesday.
On Thursday, PepsiCo and Netflix will deliver results, while American Express is due to report on Friday.
Adding to market jitters is the ongoing rift between the White House and the Federal Reserve.
On Sunday, National Economic Council Director Kevin Hassett told ABC News that President Trump can fire Fed Chair Jerome Powell “if there’s cause”.
The administration is reportedly scrutinising the Federal Reserve’s US$2.5 billion renovation project at its Washington, D.C. headquarters as a possible justification for Powell’s removal.
