Wall St futures slip as markets await clarity on tariffs
Futures off: Dow 0.18%, S&P 500 0.45%, Nasdaq 0.61%
July 7 (Reuters) - U.S. stock index futures slipped on Monday as investors grappled with uncertainty around U.S. tariff policies, while Tesla's shares dropped after CEO Elon Musk announced plans to form a political party.
The White House is close to finalizing several trade pacts in coming days and will notify other countries of higher tariff rates by July 9, President Donald Trump said on Sunday, with the higher rates set to take effect on August 1.
Trump also threatened an extra 10% tariff on countries aligning themselves with the "Anti-American policies" of the BRICS group of Brazil, Russia, India, China and South Africa.
In April, Trump unveiled a base tariff rate of 10% on most countries and additional duties ranging up to 50%, although he later delayed the effective date for all but 10% until July 9. The new date offers countries a three-week reprieve.
At 5:30 a.m. ET, Dow E-minis were down 79 points, or 0.18%, U.S. S&P 500 E-minis were down 28.75 points, or 0.45%, and Nasdaq 100 E-minis were down 141.25 points, or 0.61%.
The market's reaction was cautious, as investors weighed the lack of fresh details and braced for light summer trading in a week light on economic data — except for Thursday's initial jobless claims.
Monday's pullback also comes after the S&P 500 and the Nasdaq closed at record highs on Thursday following a surprisingly strong jobs report that pointed to resilience in the labor market.
The Dow closed the holiday-shortened week about 0.5% away from its own record high.
Among megacap stocks, Tesla dropped 6.6% in premarket trading after Musk announced the formation of a new U.S. political party, marking a new escalation in his feud with Trump.
Nvidia last week was on track to become the world's most valuable company in history, with the chipmaker's market capitalization nearing $4 trillion. Its shares were nearly 1% lower on the day.
Meanwhile, Trump's chaotic tariff policies and what that might do to economic growth and inflation have kept the Federal Reserve from cutting interest rates, and minutes of its June meeting scheduled for release on Wednesday should offer more clues on the interest rate outlook.
Traders have now priced out a July rate cut, with September odds standing at 66%, according to CME Group's FedWatch tool.
Attention is on the massive tax-cut and spending bill approved by the Republicans in the House of Representatives after markets closed on Thursday that is set to balloon the national debt by $3.4 trillion.
While the stimulus could juice economic growth, it also threatens to stoke inflation, making the Fed's next move harder to predict. (Reporting by Pranav Kashyap in Bengaluru; Editing by Maju Samuel)
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