Wall Street looked set for a softer open to the week as renewed tariff uncertainty and geopolitical tension weighed on sentiment.
Futures pointed lower across the board, with the Nasdaq down 0.6%, the S&P 500 off 0.4% and the Dow Jones 0.3% weaker as traders gear up for the last trading week of the month.
This follows the US Supreme Court ruling at the end of last week that Donald Trump’s broad-based tariffs were unconstitutional, which led to an initially positive reaction from investors.
The President immediately responded with plans for a 10% global tariff under the ‘Section 122’ authority, increasing this to 15% on Saturday, the maximum tariff that can be imposed using these rules, which only lasts until mid-July before needing Congressional approval.
Precious metals were in demand due to the new uncertainty, and this trend continued on Monday, with gold up over 1% to $5,163.4 an ounce and silver rising almost 3% to $87/oz.
Meanwhile oil prices ticked higher as investors brace for potential US strikes on Iran, with WTI up 0.2% at $66.61 a barrel.
European markets started mostly in the red but have moved into positive territory as the session has worn on.
The new US tariffs are likely to be “only smoke and mirrors”, said ING economist Carsten Brzeski, while the White House prepares alternative measures, such as under Section 301 trade rules.
Weaker US futures suggested the latest tariff headlines are “fueling the sell-America trade”, said market analyst Kathleen Brooks at XTB.
The Nasdaq remains in the red for the year to date after what Brooks described as a “bruising month that has been categorized by broad US stock sell offs spurred by fears about the latest AI tools”, with the US tech index is a major global underperformer.
Factory orders and the Dallas Fed manufacturing index are due on Monday.
Later in the week, President Trump will deliver his State of the Union address to Congress early on Wednesday, while Nvidia will release its earnings after the close that day.
A phalanx of Fed members are lined up to speak during the week, which ends with wholesale inflation data on Friday.
“There are some hints of frayed investor nerves now starting to show,” said David Morrison at Trade Nation, “as the major US indices struggle to maintain their upside momentum.
“Renewed tariff uncertainty is now added to concerns over US-Iranian nuclear proliferation talks, while private credit shows some unwelcome cracks which could infect the banking sector and beyond.”