Dow Jones, S&P 500, Nasdaq Hesitate Amid Report Trump May Exploit Emergency Tariff Powers

Another day, another report suggests that President-elect Donald Trump will look for creative solutions to impose broad tariffs on America’s trading partners.

CNN’s Kayla Tosh reported this early Wednesday Trump is “considering declaring a national economic emergency to provide legal justification for a slew of global tariffs on allies and adversaries.”

Following the report, stock futures pared gains and traded in negative territory.

About an hour before the market opened, futures were little changed.

The market reaction on Wednesday was the opposite of what investors saw on Monday, when a report from The Washington Post suggested that Trump might look to narrow the scope of his tariff proposals. After the markets rejoiced with this story, The president-elect denied this.

But the back-and-forth seen in major stock indexes over Trump’s tariffs still plays second fiddle to the factor that matters most to investors right now: the Federal Reserve.

Tuesday The sell-off is the latest example of this.

Inflation data within ISM Latest manufacturing PMI reportcoupled Job opportunity data Which showed a slight rise in labor demand during November, saw markets cut interest rates by another 0.25% from 2025.

In contrast, the Nasdaq fell nearly 2% with stocks of strong companies such as Nvidia (NVDA) as it lost 6% after reaching its highest level ever earlier in the session.

As Trump’s inauguration approaches, investors and news enthusiasts will see many echoes of the run-up to his inauguration in 2017 in the flow of recent news – everything is on the table: renaming bodies of water, annexing Greenland, and so on.

Just because markets aren’t jumping to price in the maximum amount of risk posed by Trump’s every proposal, that doesn’t mean they don’t matter.

But the Federal Reserve meets 8 times a year to vote on monetary policy, and interest rates are the most important driver of stock prices in the long term.