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Trade Tensions Rattle Wall Street’s Momentum

After an impressive streak of gains that pushed major U.S. indices to record highs, the stock market faced a sharp reversal as renewed trade tensions triggered investor anxiety. The Dow Jones Industrial Average, S&P 500, and Nasdaq all pulled back in Friday’s session, with financials and industrials leading the retreat. Concerns were reignited after new tariffs targeting tech and manufacturing imports between the U.S. and China surfaced, prompting fears of escalating economic friction. These measures, aimed at protecting domestic industries, were met with criticism from global partners and stoked uncertainty about the broader trade landscape. Analysts note that while earnings remain strong and economic indicators are still resilient, the shadow of protectionism looms large. Investor sentiment, which had been buoyed by dovish monetary policy and solid corporate results, now finds itself caught in geopolitical crosswinds. Many traders are now recalibrating their expectations heading ...
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U.S. stocks open mixed and turn lower after inflation report as Fed decision looms


  • Inflation data: The U.S. cost of living increased 0.1% month over month and 3.1% year over year in November, slightly higher than expected. Core inflation was in line with estimates at 0.3% month over month and 2.3% year over year.
  • Market reaction: U.S. stocks opened mixed and turned lower after the inflation report, as investors weighed the implications for interest rates and the Fed’s policy outlook. The Dow Jones Industrial Average fell 0.43%, the S&P 500 slid 0.39%, and the Nasdaq Composite dropped 0.2% on Tuesday.
  • Fed decision: The Federal Reserve is set to announce its interest rate decision on Wednesday, with no change expected in the current range of 5.25% to 5.50%. The Fed is also expected to provide an update on its balance sheet reduction plan and its economic projections for 2024 and beyond.
  • Market outlook: The S&P 500 index is near its record high, having gained 20.4% year to date, partly on hopes of slowing inflation and rate cuts in the future. However, some analysts warn that the inflation trend is still above the Fed’s 2% target and that the central bank may have to tighten monetary policy more than expected to keep inflation under control.
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