Trump's New Tariff Salvo Stalls U.S Stock Futures

Wall Street's brief rally appeared to be losing steam on Tuesday as investor sentiment was dampened by fresh tariff threats from former President Donald Trump and the growing possibility that interest rate cuts may not be as aggressive as markets had anticipated.

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Futures tied to the Nasdaq 100 dipped 0.2%, while S&P 500 contracts slipped 0.1%, signaling a potential pullback following one of the strongest trading sessions of the year for U.S. equities.

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Tesla Inc. was poised to break its longest winning streak of 2025 after data revealed a decline in sales across Europe. Meanwhile, European stocks moved higher, with the Stoxx 600 index gaining 0.6%, rebounding from a three-day losing streak.

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Market volatility was fueled by Trump's latest tariff remarks, in which he threatened to impose a 25% duty on any country purchasing crude oil from Venezuela. This news contributed to a 0.5% rise in Brent crude prices, extending gains from the previous session.

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Tariffs have dominated financial discussions this week, with U.S. stocks rallying on Monday after signs that trade sanctions may not be as broad as initially feared.

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Trump also announced plans to introduce tariffs on automobile imports in the coming days, while hinting that certain nations could be granted exemptions from the “reciprocal” tariffs set to take effect on April 2.

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Uncertainty surrounding the full scope of these tariffs is creating market anxiety. “Between now and April 2, it’s a waiting game,” said Michael Nizard, head of multi-asset investments at Edmond de Rothschild Asset Management. “If Trump follows through on reciprocal tariffs as he has suggested, both Wall Street and Main Street could face negative consequences.”

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Beyond trade policy, investors are also grappling with the potential economic impact of tariffs, particularly in relation to inflation and growth. Recent data has pointed to weakening economic momentum, but inflation remains stubbornly high.

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While futures markets still anticipate two Federal Reserve rate cuts this year, Atlanta Fed President Raphael Bostic expressed a more cautious outlook on Tuesday, suggesting only one 25-basis-point reduction due to persistent inflationary pressures.

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Treasury yields edged higher in response to Bostic’s remarks, while the Bloomberg Dollar Index remained steady following four consecutive sessions of gains. Meanwhile, gold prices saw a slight uptick, hovering just below recent record highs.

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Asian markets also faced headwinds, with Hong Kong-listed Chinese technology stocks tumbling 3.8%. The decline was attributed to disappointing earnings reports and Xiaomi Corp.'s large share sale, which weighed on investor confidence.

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In Turkey, equities rebounded sharply, climbing approximately 4%, while the lira held stable. Authorities implemented emergency measures to stabilize markets after the arrest of a prominent opposition figure rattled investors.

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Later on Tuesday, top economic officials were scheduled to engage with international investors to address concerns and provide reassurance about Turkey’s financial stability.

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