Dow Futures Decline Amid Trade Tensions: OECD Warns Trump Tariffs Could Hit Growth

While Dow Jones futures were down 0.33% at the time of writing, the S&P 500 futures fell 0.29%.

U.S. stocks appear set for a weak opening on Tuesday amid escalating trade tensions and concerns that President Donald Trump’s tariffs could hurt economic growth around the world.

Trade tensions continued to spiral on Monday, but a media report suggested that Trump and Chinese President Xi Jinping could talk one-on-one to diffuse a flare-up between the U.S. and China.

While Dow Jones futures were down 0.33% at the time of writing, the S&P 500 futures fell 0.29%, and the tech-heavy Nasdaq 100’s futures declined 0.20%. Futures of the Russell 2000 index were down 0.17%.

Meanwhile, the SPDR S&P 500 ETF Trust (SPY) fell 0.25%, while Invesco QQQ Trust (QQQ) declined 0.14% on Tuesday morning.

Bitcoin (BTC) gained 0.95% in the past 24 hours.

Asian markets ended Tuesday’s trading session on a largely positive note, with the Hang Seng index leading with gains of 1.51%, followed by the TWSE Capitalization Weighted Stock index at 0.59%, and the Shanghai Composite at 0.43%.

The Nikkei 225 edged 0.06% lower, while the KOSPI was closed for trading on account of presidential elections.

Powell’s Approach Gets Another Backer

Federal Reserve Chair Jerome Powell’s wait-and-watch approach to interest rate cuts got another backer on Monday.

Dallas Federal Reserve President Lorie Logan underscored that the labor market is stable and the inflation is slightly above the Fed’s 2% target. With President Trump’s tariffs causing uncertainty, she added the Fed is keeping a close watch on data to fine-tune its response.

While U.S. steel stocks rose sharply after President Trump announced plans to double tariffs on steel and aluminum imports to 50% from 25%, analysts at Charles Schwab believe these levies could ultimately harm U.S. steelmakers.

“Though protectionist policy might help U.S. steel companies, the industry employs fewer Americans than it once did, and tariffs that protect remaining jobs in the sector might raise prices, hurting margins, for many other U.S. companies using steel,” the brokerage observed.

The Organization for Economic Cooperation and Development (OECD) released a new report stating that President Trump’s tariffs could hit global GDP further in 2026.

The agency reduced its 2025 U.S. GDP forecast to 1.6% from the 2.2% expansion it had forecast in March. This compares to the 2.8% growth in 2024. It now sees GDP growth of 1.5% for 2026.

This week is packed with speeches and economic data releases.

Fed’s Beige book, construction spending data, ADP employment numbers, U.S. employment, unemployment, and wage reports are all scheduled to be released throughout the week.

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