Stock market performance today: Early advancements in U.S. stock markets following a steep decline on Monday
Tuesday Market Movement
Wall Street is eyeing gains early tomorrow, following yesterday's dramatic drop due to uncertainties surrounding U.S. investments triggered by President Trump's ongoing trade war and targeted attacks on Federal Reserve Chair Jerome Powell, who he branded a "major loser."
S&P 500 futures are surging 0.8%, attempting to recover some ground from Monday's decline of 2.4%. Businesses and investors are also taking notice of Dow Jones and Nasdaq futures, which are restoring momentum with rises of 0.8% and 0.9%, respectively.
Trump has persistently urged the Fed to lower key interest rates to bolster the economy. However, the Fed remains wary of harbinger fresh inflation, having witnessed rates soaring beyond 9% during the COVID-19 pandemic's peak three years ago.
A turbulent takeover of Powell could ignite a full-blown crisis in global financial markets. Despite Wall Street's preference for lower interest rates boosting stock prices, the broader worry would center around a potentially less independent Fed grappling to maintain inflation at bay. Such a move could severely undermine the United States' reputation as the global economy's safest haven for cash reserves.
Bond markets have already detected the shifting tides, as seen in the 10-year Treasury yield creeping up from 4.34% and reaching 4.43% overnight before settling at 4.39% in the wee hours. This significant surge brings the yield at par with the levels recorded four percent of a month ago — a substantial move for the bond market.
The U.S. dollar has also been exhibiting instability against the Japanese yen and other currencies, reverberating with the latest upheaval. The dollar's value dipped slightly to 140.24 yen from 140.80 yen. Traders have observed the dollar slumping all the way down to 139 yen on Monday, marking a new 52-week low.
First Solar is experiencing a 7.2% surge following the Department of Commerce's announcement of stricter-than-expected solar tariffs on some southeast Asian communities. Northrop Grumman, however, plunged 10.6%, after unveiling a decline in first-quarter sales compared to the same period last year. Profits for the military contractor dropped by almost half, as they grappled with additional costs related to the B-21 bomber program.
Technology companies, which have been on the receiving end of considerable market volatility in recent weeks, are slowly inching up. Nvidia and Meta Platforms are registering gains, inching up by less than 1% each before the bell. Tesla shares, beleaguered by continuous protests and heavy criticism of its CEO's high-profile role overseeing a cost-cutting purge, inched up less than 1%, ahead of this quarter’s earnings report due after the bell on Tuesday.
Tesla shares have lost around 40% of their value since the beginning of 2025.
European indices are wavering on Tuesday, with France's CAC 40 and Germany's DAX each scheduling a 0.7% dip, while Britain's FTSE 100 holds steady.
Asian trading is cautiously optimistic, amid Trump's controversial tariffs and the repercussions from China. The Nikkei 225 is witnessing a 0.2% decline, end the day at 34,220.60. The Australian S&P/ASX 200 has lost minimal ground, falling less than 0.1% to 7,816.70, while South Korea's Kospi continues to pierce below the 2,486.64 mark. Hong Kong’s Hang Seng ascended nearly 0.8%, reaching 21,562.32, while the Shanghai Composite increased 0.3%, striking 3,299.76.
The lingering question about trade tariffs and reciprocal retaliation from China continues to loom over the region, as countries move towards the negotiating table with apprehension.
"The urgency to engage in discussions is undeniable, even though striking a fair deal in these complex economic circumstances may prove challenging," claims Tan Boon Heng, executive at Mizuho Bank's Asia & Oceania Treasury Department.
This escalating trade war and political tensions could introduce new layers of uncertainty and instability to global financial markets, potentially fueling inflationary pressures and geo-economic polarization.
References:[1] Yuri Kageyama and Matt Ott, "Stocks plummet on Trump's Fed attack", Yahoo Finance. [online] Available at: https://finance.yahoo.com/news/stocks-plummet-trumps-fed-attack-041439188.html. [Accessed 18 January 2023].
- The ongoing trade war and attacks on Fed Chair Jerome Powell by President Trump have caused uncertainties in U.S. investments, leading to a dramatic drop in the stock-market.
- The S&P 500 futures are surging in an attempt to recover some ground from Monday's decline, while Dow Jones and Nasdaq futures are also restoring momentum.
- The Fed, wary of harboring fresh inflation, remains cautious about lowering key interest rates despite Trump's urging.
- A turbulent takeover of Powell could potentially ignite a crisis in global financial markets, with the broader worry being a potentially less independent Fed struggling to maintain inflation at bay.
- The U.S. dollar has shown instability against the Japanese yen and other currencies, as evidenced by its dipping value on Tuesday.
- Technology companies, hit by recent market volatility, are inching up, with Tesla registration a minimal gain before its quarterly earnings report.
- Asian trading is cautiously optimistic amid Trump's controversial tariffs and the repercussions from China, with the Shanghai Composite and Hang Seng exhibiting growth, while the Nikkei 225, Australian S&P/ASX 200, and South Korea's Kospi experiencing declines.
