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U.S. equity futures moved lower in early Tuesday trading, while gold prices jumped to a fresh all-time high, as markets reacted to the latest round of tariffs from President Donald Trump and looked for comments on its effects for the U.S. economy from Federal Reserve Chairman Jerome Powell.
President Trump unveiled his plan to push levies on steel an aluminum imports by 15%, taking them to 25%, from the White House late Monday, telling reporters there would be no “exemptions of any kind” from the newly-established duties.
The move reminded investors once again of the latent trade war risks that Trump’s plans have inserted into the global economy, with the European Union indicating its plans to assign targeted, yet reciprocal, tariffs on U.S.-made goods heading into the bloc.
“I deeply regret the US decision to impose tariffs on European steel and aluminum exports,” said European Commission President Ursula von der Leyen. “Unjustified tariffs on the EU will not go unanswered; they will trigger firm and proportionate countermeasures.”
Gold prices were the first to react, rising to a new all-time high of $2,942 per ounce in overnight trading while the U.S. dollar index head steady against a basket of its global peers at 108.251.
Fed Chair Jerome Powell will face questions from the Senate Banking Committee later this morning.
Anna Moneymaker/Getty Images
“A global trade war could cause widespread economic damage, increasing the appeal of safe-haven gold,” said Ricardo Evangelista, senior analyst at ActivTrades.
“At the same time, American protectionism is likely to push up prices for imported goods, driving inflation higher and enhancing the appeal of the precious metal, which is seen as a hedge against monetary devaluation,” he added.
Related: Gold price eyes $3,000 as bullion surges on Trump tariff risks
Treasury bond yields nudged modestly higher, as well, with benchmark 10-year notes rising past the 4.5% mark, and last trading at 4.253%, while 2-year notes were marked at 4.281% ahead of Powell’s testimony to the Senate Banking Committee later this morning.
On Wall Street, stocks are set for a modestly weaker open on the heels of last night’s solid close, with futures contracts tied to the S&P 500 indicating a 20 point opening bell decline.
Futures linked to the Dow Jones Industrial Average, meanwhile, are priced for a 90 point pullback with the tech-focused Nasdaq called 100 points lower.
Away from stocks, Tesla (TSLA) CEO Elon Musk unveiled a surprise $97.4 billion bid for OpenAI, the non-profit backed by Microsoft (MSFT) , even as the group is nearing a funding round with SoftBank that could value it closer to $300 billion.
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In Europe, the regional Stoxx 600 benchmark slipped 0.03% in early Frankfurt trading, with Britain’s FTSE 100 down 0.09% in London.
Overnight in Asia, the region-wide MSCI ex-Japan index was marked 0.48% lower into the close of trading, while the Nikkei 225 was closed for Japan’s traditional February Fountain Day holiday.
Related: Veteran fund manager issues dire S&P 500 warning for 2025
