U.S. stock index futures were largely unchanged on Sunday evening following sharp monthly declines on Wall Street, as investor sentiment remained cautious amid soon-to-be-imposed tariffs.
Market participants also analyzed last week’s data revealing a moderate increase in inflation alongside weakening consumer sentiment, creating a nuanced and uncertain outlook for the Federal Reserve’s future rate decisions.
S&P 500 Futures inched 0.1% higher to 5,979.00 points, while Nasdaq 100 Futures gained 0.1% to 20,941.25 points by 18:34 ET (23:34 GMT). Dow Jones Futures were largely steady at 43,897.0 points.
Trump tariffs to take effect this week, uncertainty persists
In a recent interview on Fox News, U.S. Commerce Secretary Howard Lutnick said that tariffs on imports from Mexico and Canada are scheduled to take effect on Tuesday, March 4, 2025.
While the initial plan proposed a 25% tariff, Lutnick indicated that President Donald Trump will determine the exact tariff levels on Tuesday.
He added that Trump was set to raise an additional 10% tariff on China.
Major stock indexes lost sharply in February, mainly due to volatility stemming from Trump tariffs and losses in tech on changing expectations around artificial intelligence.
The NASDAQ Composite dropped 4% in February, while the S&P 500 fell 1.5% and the Dow Jones Industrial Average declined 1.6%.
US economy starts 2025 on a weak footing
The Federal Reserve had implemented a total of 100-basis-point interest rate cuts last year but conveyed a hawkish stance in December due to persistent inflationary pressures.
Data on Friday showed that the PCE price index rose 0.3% in January, maintaining the same rate of increase as in December.
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Year-over-year, the index showed a 2.5% rise, a slight deceleration from December’s 2.6%. Core inflation, excluding food and energy, also gained 0.3% in January, with a reduced year-on-year rise of 2.6%, down from 2.9% in December.
Despite this slightly positive inflation data, consumer sentiment declined by 0.2% in January, marking the first decrease in nearly two years.
Contributing factors included potential new tariffs and high inflation, which have dampened consumer confidence and spending.
Concurrently, the Atlanta Federal Reserve now projects a 1.5% annualized growth rate for the U.S. economy in the first quarter of 2025, a slowdown from the 2.3% growth observed in the fourth quarter of 2024.
“The economy has started 2025 on a weak footing with the ’negatives’ from President Trump’s policy thrust taking an early toll via weaker consumer confidence and spending at the same time as importers look to front run the threat of tariffs,” ING analysts said in a recent note.
The combination of easing inflation and declining consumer sentiment presents a complex economic landscape.
