U.S. Stock Futures Rise; Trump Tariffs, Inflation Data Take Center Stage

U.S. stock index futures rose on Tuesday, buoyed by easing fears over aggressive trade tariffs under President-elect Donald Trump and ahead of crucial inflation data releases.

Dow Jones futures were up 150 points, about 0.4%, S&P 500 futures were up 30 points, about 0.5% and Nasdaq 100 futures gained about 135 points, or 0.7%.

Wall Street closed Monday’s session mixed, with gains in cyclical stocks partially offsetting ongoing losses in technology stocks. The S&P 500 gained 0.2%, and the Dow Jones Industrial Index rose 0.9%, both rebounding from two-month lows. Meanwhile, the Nasdaq Composite lagged, shedding 0.4% to hover near its lowest levels in two months.

Trump’s Team Considers Gradual Tariff Hikes: Bloomberg

According to a report by Bloomberg on Monday, Trump’s economic team is considering a plan for gradually increasing import tariffs over the coming months. The proposal aims to ease tensions with trading partners while avoiding an immediate inflationary spike.

The draft plan, not yet presented to Trump, outlines monthly tariff hikes ranging from 2% to 5%, leveraging the executive authority under the International Emergency Economic Powers Act.

President-elect Trump, who will be inaugurated next week on January 20, has promised sweeping trade tariffs on major economies, with China being a primary target. His proposal includes a minimum 10% to 20% tariff on all imports and up to a 60% tariff on Chinese goods.

Reports suggest Trump may declare a national economic emergency to implement this strategy, escalating market concerns about the impact on inflation and long-term interest rates. Federal Reserve officials have warned that such tariffs could underpin inflationary pressures and keep rates elevated for an extended period.

Inflation Data Front and Center

This week’s focus shifts to December’s consumer price index (CPI) inflation data, set for release on Wednesday. These figures will offer critical insight into the Federal Reserve’s interest rate trajectory, especially after last week’s robust payroll data reinforced expectations of a slower pace of rate cuts through 2025.

Ahead of the CPI release, markets will examine the producer price index (PPI) on Tuesday. Economists forecast a 0.4% monthly increase in PPI for December, consistent with the prior month. Year-over-year, the PPI is expected to rise 3.4%, accelerating from November’s 3.0%.

Bank Earnings Take the Spotlight

Earnings season kicks off in earnest on Wednesday, with several major Wall Street banks set to report their results. Among the highlights are JPMorgan Chase (JPM), Wells Fargo (WFC), Goldman Sachs (GS), and Citigroup (C).

Meanwhile, healthcare stocks such as UnitedHealth Group (UNH) and Humana (HUM) rose after the Biden administration proposed 2026 reimbursement rates for Medicare Advantage plans, suggesting a 2.2% increase in payments.

Shares of Lululemon Athletica (LULU) jumped in pre-market trading after the company raised its holiday profit and revenue forecasts. Similarly, KB Home (KBH) surged 9% following fourth-quarter results that exceeded analysts’ expectations on both revenue and earnings.

Crude Oil Slips Amid Sanctions and Supply Concerns

Crude oil prices fell on Tuesday, retreating from four-month highs driven by new U.S. sanctions on Russian oil exports and supply uncertainty.

Oil prices had risen steadily in the previous two sessions after the Biden administration announced its most extensive sanctions package yet, designed to curb Russia’s oil and gas revenue streams.

These measures are anticipated to disrupt Russian oil exports significantly, forcing major importers like China and India to seek alternative suppliers in regions such as the Middle East, Africa, and the Americas.

Conclusion

The market’s focus this week revolves around inflation data and corporate earnings, both of which could shape expectations for Federal Reserve policy and broader economic momentum. As Trump’s trade strategies loom, investors remain cautious about potential ripple effects on inflation, interest rates, and global supply chains. Meanwhile, developments in the energy sector and corporate performance continue to drive sector-specific movements, highlighting a complex landscape for market participants.