United States stock futures declined on Tuesday (Wednesday AEST), extending losses in regular trade as investors braced for a new wave of tariffs scheduled to take effect later in the session.
By 8:30 am AEST (10:30 pm GMT), Dow Jones Industrial Average futures, S&P 500 futures, and Nasdaq-100 futures fell 1.2%, 1.3%, and 1.4%, respectively.
Market anxiety surged following President Donald Trump’s announcement last Wednesday of sweeping tariffs. Since then, stocks have experienced their sharpest four-day decline since the onset of the COVID-19 pandemic in 2020.
On Tuesday, the Dow Jones Industrial Average fell 0.8%, the S&P 500 declined 1.6%, and the Nasdaq Composite slid 2.2%.
The S&P 500 has now fallen nearly 19% from its February peak, teetering on the edge of a bear market, which is defined as a 20% fall from record-highs.
More volatility is expected as the latest batch of tariffs takes effect. U.S. Customs will begin collecting duties from 86 countries at midnight, including a sweeping 104% tariff on many Chinese imports.
Retaliation from trade partners is also underway. Canada reaffirmed on Tuesday its plan to impose 25% tariffs on U.S.-made vehicles. These duties are set to apply to cars not compliant with the United States-Mexico-Canada Agreement (USMCA), as well as to vehicles that contain non-Canadian and non-Mexican components—even if otherwise compliant.
Despite the rising tensions, some hope remains that deals can still be struck. ANZ analysts wrote: “The expectations of a possible trade agreement between the U.S. and key trading partners supported near-term market sentiment over much of the overnight session.”
Treasury Secretary Scott Bessent added optimism, saying he expects “a couple of big deals very quickly”. He highlighted ongoing discussions about an Alaska energy deal involving Japan, with potential extensions to South Korea and Taiwan.
Meanwhile, Trump posted on social media that he had a call with the Acting President of South Korea, saying they were within the “confines and probability of a ‘great deal’”. However, he noted that progress with China remains elusive, adding that he was still “waiting for a call from Chinese officials”.
Aside from the escalating trade conflict, investors are also watching for the Federal Reserve’s meeting minutes for further clues on monetary policy.
