Dow, S&P 500, Nasdaq futures retreat amid report Trump could tap emergency powers for tariffs

US stock futures slipped on Wednesday as investors absorbed a report that President-elect Donald Trump is considering declaring a national economic emergency to pave the way for proposed tariffs.

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Futures on the S&P 500 futures (ES=F) and on the tech-heavy Nasdaq 100 (NQ=F) each shed roughly 0.3%, reversing earlier pre-market gains. Dow Jones Industrial Average futures (YM=F) moved down 0.2%.

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Meanwhile, the 10-year Treasury yield (^TNX) jumped to around 4.72% to hold near eight-month highs.

Trump is looking to the emergency powers to provide a legal basis for his proposed hefty and wide-ranging tariffs, CNN reported. The news jolted markets already on guard for Trump economic surprises as Inauguration Day nears, bracing for a wave of policy moves and executive orders.

Investors are keeping a close eye on prospects for the economy as they gauge shifts in the chances of slower interest-rate cuts this year. Fresh jobs data and Federal Reserve minutes due later could reset their bets.

Stocks sold off and the benchmark Treasury yield spiked on Tuesday as service sector and labor market readings revived concerns over stubborn inflation. The data gives weight to Fed officials’ hints that they will lower rates slower than foreseen, and traders now see a less than 50% chance of any easing before June, according to the CME FedWatch tool.

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Markets could switch back to viewing strong economic data releases as negative and a spur to “higher for longer” rates, some analysts believe.

An ADP update on private payrolls in December and minutes from Fed policymakers’ latest meeting are due later Wednesday. The data will feed into expectations for the crucial December jobs report release on Friday.

Meanwhile, Nvidia (NVDA) stock nudged higher as it struggled to recover from a rout that erased $220 billion in market value.

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