Looming Tariff Announcement May Weigh On Wall Street

The major U.S. index futures are currently pointing to a sharply lower open on Wednesday, with stocks likely to give back ground after ending yesterday's volatile session mostly higher.

The downward momentum on Wall Street comes amid concerns about the impact of President Donald Trump's reciprocal tariffs on U.S. trade partners.

Trump is scheduled to announce the new tariffs in a Rose Garden event shortly after the close of trading, with White House press secretary Karoline Leavitt indicating the new levies will be "effective immediately."

A report from Bloomberg said Trump's team is still finalizing the level and scope of the new import taxes he is slated to unveil.

Citing people familiar with the ongoing discussions, Bloomberg said the White House has not reached a firm decision on their tariff plan and continued to hash out their options in meetings on Tuesday.

The futures remained firmly negative even after payroll processor ADP released a report showing private sector employment in the U.S. increased by more than expected in the month of March.

After recovering from an early move to the downside and moving mostly higher in morning trading on Tuesday, stocks showed a lack of direction over the remainder of the session. The major averages spent the day swinging back and forth across the unchanged line.

The tech-heavy Nasdaq eventually ended the day firmly positive, jumping 150.60 points or 0.9 percent to 17,449.89. The S&P 500 also climbed 21.22 points or 0.4 percent to 5,633.07, but the narrower Dow edged down 11.80 points or less than a tenth of a percent to 41,989.96.

The volatility on the day came as traders continue to express uncertainty about Trump's trade policies ahead of the announcement of reciprocal tariffs on Wednesday.

A report from the Washington Post said White House aides have drafted a proposal to impose tariffs of around 20 percent on most imports to the U.S.

However, the Washington Post noted White House advisers cautioned that several options are on the table and no final decision has been made.

The higher close on the day may have reflected bargain hunting following recent weakness on Wall Street, which saw the Nasdaq and S&P 500 hit six-month intraday lows on Monday before regaining ground.

While the S&P 500 managed to reach positive territory, the Nasdaq ended the day at its lowest closing level since early last September.

In U.S. economic news, a report from the Institute for Supply Management showed activity in the U.S. manufacturing sector contracted in March after two consecutive months of expansion.

The ISM said its manufacturing PMI dipped to 49.0 in March from 50.3 in February, with a reading below 50 indicating contraction. Economists had expected the index to edge down to 49.5.

Despite the higher close by the broader markets, biotechnology stocks pulled back sharply after surging on Monday, resulting in a 3.2 percent plunge by the NYSE Arca Biotechnology Index.

Pharmaceutical stocks also showed a significant move to the downside, dragging the NYSE Arca Pharmaceutical Index down by 2.8 percent.

Healthcare and airline stock also saw considerable weakness on the day, while software stocks turned in a strong performance, contributing to the advance by the Nasdaq.

Commodity, Currency Markets

Crude oil futures are sliding $0.54 to $70.66 a barrel after falling $0.28 to $71.20 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $3,159.90, up $13.90 compared to the previous session's close of $3,146. On Tuesday, gold edged down $4.30.

On the currency front, the U.S. dollar is trading at 149.20 yen compared to the 149.61 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0810 compared to yesterday's $1.0793.

Asia

Asian stocks ended on a muted note on Wednesday as caution prevailed ahead of U.S. President Donald Trump's sweeping tariffs announcement expected later in the day.

Treasury yields advanced after a multi-day drop and the dollar held steady, pushing gold prices down from new record highs reached earlier this week.

Oil extended losses on concerns that new U.S. tariffs may drag on global growth and weigh on fuel demand.

China's Shanghai Composite Index finished marginally higher at 3,350.13 after a choppy session. Hong Kong's Hang Seng Index gave up early gains to end marginally lower at 23,202.53.

Japanese markets ended slightly higher after a choppy session. The Nikkei 225 Index rose 0.3 percent to 35,725.87, while the broader Topix Index settled 0.4 percent lower at 2,650.29.

Uniqlo-owner Fast Retailing rallied 3.7 percent and chip-testing equipment maker Advantest climbed 2.6 percent, while energy stocks tracked crude prices lower.

Seoul stocks fell notably, with the Kospi ending down 0.6 percent at 2,505.86. Hyundai Motor, Hyundai Steel and Posco Holdings gave up 1-3 percent.

Australian markets edged up slightly, with property developers, financials and technology stocks pacing the gainers. Mining and energy stocks fell, limiting overall gains in the broader market.

The benchmark S&P/ASX 200 Index crept up 0.1 percent to 7,934.50, while the broader All Ordinaries index finished marginally higher at 8,133.10.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index ended flat with a positive bias at 12,320.19.

Europe

European stocks have moved to the downside on Wednesday ahead of the reciprocal tariffs announcement from the U.S. later in the day.

The new tariff rates will take effect immediately after they are announced by U.S. President Donald Trump.

The German DAX Index is down by 1.7 percent, the French CAC 40 Index is down by 1.0 percent and the U.K.'s FTSE 100 Index is down by 0.9 percent.

Fuchs SE, a German manufacturer of lubricants and related specialty products, has fallen after acquiring U.S.-based IRMCO Advanced Metalforming Lubricant Technologies for an undisclosed sum.

Grafton Group shares have also moved lower. The distributor of building materials said that it has agreed to acquire HSS Hire Ireland Ltd. from HSS Hire Group for 31.6 million euros on a cash and debt free basis.

Meanwhile, Svitzer shares have soared after Denmark's AP Moller Holding proposed an all-cash deal to acquire the remaining shares of the towage and marine service provider.

Nordex SE has also rallied. The wind turbine manufacturer announced that it has received two orders totaling 750 MW from a wind energy project developer in Türkiye.

U.S. Economic News

Private sector employment in the U.S. increased by more than expected in the month of March, according to a report released by payroll processor ADP on Wednesday.

ADP said private sector employment jumped by 155,000 jobs in March after climbing by an upwardly revised 84,000 jobs in February.

Economists had expected private sector employment to grow by 105,000 jobs compared to the addition of 77,000 jobs originally reported for the previous month.

"Despite policy uncertainty and downbeat consumers, the bottom line is this: The March topline number was a good one for the economy and employers of all sizes, if not necessarily all sectors," said ADP chief economist Nela Richardson.

At 10 am ET, the Commerce Department is due to release its report on new orders for manufactured goods in the month of February. Factory orders are expected to climb by 0.5 percent in February after jumping by 1.7 percent in January.

The Energy Information Administration is scheduled to release its report on oil inventories in the week ended March 28th at 10:30 am ET. Crude oil inventories are expected to fall by 2.0 million barrels after decreasing by 3.3 million barrels in the previous week.

At 4:30 pm ET, Federal Reserve Board Governor Adriana Kugler is due to speak on "Inflation Expectations and Monetary Policymaking" at the Griswold Center for Economic Policy Students and Julis-Rabinowitz Center for Public Policy and Finance 2025 Public Talk.

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