Wall Street’s main indexes dipped and the S&P 500 came off record highs on Wednesday as investors assessed U.S. President Donald Trump’s latest tariff threats and awaited minutes from the central bank’s January meeting.
Trump said on Tuesday that he intended to impose auto tariffs “in the neighborhood of 25%”, along with similar duties on semiconductor and pharmaceutical imports.
Since his inauguration in January, Trump has imposed a 10% tariff on all imports from China, on top of existing levies. He also announced and delayed for a month 25% duties on goods from Mexico and non-energy imports from Canada.
“Talking about tariffs is not the same as implementing tariffs, and I think we’ve seen a lot of talk over the past month or so and not a lot on the implementation side of things,” said Charlie Ripley, senior investment strategist for Allianz Investment Management.
Trump’s tariffs have raised concerns, with fears that they would fuel inflation in the U.S. and weigh on the Federal Reserve’s stance on rate cuts this year.
Minutes of the U.S. central bank’s January policy meeting – where voting members elected to let interest rates stand and Fed Chair Jerome Powell said there would be no rush to cut them again until inflation and jobs data made it appropriate – are scheduled to be released at 2 p.m. ET.
Wall St muted as recent economic data brings Fed’s next move into focus
“With the risk of inflation moving higher as well as where financial conditions are, the Fed is really not in a hurry to cut rates,” Ripley said.
Investors will look for hints on the Fed’s rate plans for the year in the minutes, in light of last week’s mixed consumer and producer prices data coupled with a sharp drop in retail sales, which had sent Treasury yields lower.
Traders currently see at least one 25-basis-point rate cut and a more than 45% chance of an additional lowering by December, according to LSEG data.
At 09:49 a.m. ET, the Dow Jones Industrial Average fell 148.73 points, or 0.33%, to 44,407.61, the S&P 500 lost 13.62 points, or 0.22%, to 6,115.96, and the Nasdaq Composite lost 52.11 points, or 0.26%, to 19,989.15.
Eight of the S&P 500’s 11 sectors traded lower, with materials leading declines with a 1.1% fall, while energy was the highest gainer with a 1.3% rise, tracking rising oil prices.
Nikola plunged 36.2% after saying it had filed for Chapter 11 bankruptcy protection.
Specialty chemicals company Celanese lost 22.2% after reporting a quarterly loss.
Payments processor Shift4 fell 11.9% after its fourth-quarter results and news that the company has agreed to buy Global Blue in a deal valued at $2.5 billion. Shares of Global Blue jumped 17.6%.
Analog Devices gained 3.4% after the chipmaker beat first-quarter profit and revenue estimates.
Declining issues outnumbered advancers by a 2.28-to-1 ratio on the NYSE, and by a 1.8-to-1 ratio on the Nasdaq.
The S&P 500 posted 11 new 52-week highs and four new lows, while the Nasdaq Composite recorded 38 new highs and 59 new lows.
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