U.S. stock index futures fell on Wednesday after CNN reported that President-elect Donald Trump is considering declaring a national economic emergency to implement a new tariff program. The minutes from the Federal Reserve's December meeting, due for release at 2:00 p.m. ET, could offer further insights into the central bank’s monetary policy outlook for 2025.
Achilleas Georgolopoulos, a market analyst at XM brokerage, noted that the minutes could reveal how concerned Fed members are about inflation and whether the December rate cut was a compromise between the hawks and doves in preparation for Trump's second term.
Investors are also closely monitoring the political situation, as they anticipate potential policy changes following Trump's inauguration. His proposed measures, including mass deportations and new tariffs, could raise inflationary pressures and spark a global trade war. However, many analysts believe that the tariffs will likely serve as a negotiating tool rather than a long-term economic strategy.
Among notable premarket movers, Nvidia saw a 1.8% rise after experiencing its largest one-day drop since September 2024 on Tuesday. Quantum computing stocks took a significant hit, with Rigetti Computing falling 16.8%, IonQ dropping 8.9%, and Quantum Computing losing 17.7%. Nvidia CEO Jensen Huang had stated that computers based on this emerging technology could be up to 30 years away from widespread use.
Tapestry rose 2.4% after Barclays upgraded its rating on the luxury brand from "equal weight" to "overweight." Additionally, quarterly earnings updates are expected next week from major banks, including JPMorgan Chase & Co. and Wells Fargo, marking the start of the earnings season.
Markets will be closed on Thursday for a national day of mourning to honor the passing of former President Jimmy Carter. As of 6:42 a.m. ET, Dow E-mini futures were down by 89 points, or 0.21%, S&P 500 E-mini futures were lower by 16.25 points, or 0.27%, and Nasdaq 100 E-mini futures dropped 69.25 points, or 0.32%. Investors are awaiting the release of key employment data and the minutes from the Fed’s latest meeting, following a sharp pullback on Wall Street the previous day. The S&P 500 and Nasdaq recorded their largest one-day declines since the Fed's December meeting, which took a cautious stance on future interest rate cuts. Robust labor market data and strong service sector activity led investors to push back expectations for a Fed rate cut to June.
Treasury yields on the 10-year bond are at an eight-month high, and analysts suggest that markets could remain volatile this year due to stretched equity valuations and uncertainty surrounding President-elect Trump's policies. Focus is now on the ADP National Employment Report for December and weekly jobless claims data, both set to be released before the market opens. These reports may provide clues about what to expect from Friday's critical non-farm payrolls data.
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