Stock futures fell Monday following the U.S. government’s announcement that tariffs are set to go into effect Aug. 1. The Dow Jones Industrial Average futures slid by 53 points, or 0.1%, while the S&P 500 and Nasdaq 100 futures dipped 0.4% and 0.5%, respectively.
In an interview with reporters Sunday, President Donald Trump and Commerce Secretary Howard Lutnick clarified the timeline for the tariffs. “Tariffs go into effect Aug. 1.
But the president is setting the rates and the deals right now,” Lutnick stated. Trump nodded in approval of Lutnick’s comment. Treasury Secretary Scott Bessent mentioned on CNN’s “State of the Union” that tariffs will return to April 2 levels on Aug.
1 if there is no progress on reaching trade deals with U.S. trading partners. Investors had been bracing for tariffs to go into effect this week after the end of Trump’s initial 90-day reprieve on the “reciprocal” tariffs. Trump threatened an additional 10% tariff on countries aligning with the “Anti-American policies” of emerging market countries, including Brazil, Russia, India, and China.
Stock futures dip after tariff news
The announcement coincided with a BRICS meeting in Rio de Janeiro, Brazil, where the group expressed concerns over unilateral tariff measures and their impact on the global economy. Last week, Wall Street saw positive momentum, with the S&P 500 and Nasdaq Composite closing at all-time highs, driven partly by confidence that the Trump administration would not implement the most severe tariffs announced in April.
Rajeev Sibal, a senior global economist at Morgan Stanley, commented on the lengthy nature of trade negotiations, noting, “While the negotiations currently taking place are likely to be narrower than a full-fledged free trade agreement, the historical precedent remains informative.”
There is concern among investors that the equity market, currently at all-time highs, could see increased volatility as more trade updates emerge. However, some remain optimistic that the stock market rally can continue, powered by the upcoming earnings season. Tom Lee, head of research at Fundstrat Global Advisors, stated, “If the impact of tariffs plays out better than expected, that’s an earnings surprise.
This is the most hated V-shaped rally.”
In other news, Tesla shares dropped more than 6% after CEO Elon Musk announced the launch of his own political party. Musk indicated that the party would focus on securing a few Senate and House seats to influence contentious legislation. His recent political involvement has made some Wall Street investors uneasy, evidenced by market reactions following his departure and re-entry into politics.
European stocks opened mixed on Monday, with the pan-European index hovering just below the flatline. Major bourses moved in opposite directions, with London’s index down 0.1%, the French index remaining relatively unchanged, and Germany’s index gaining 0.4%. U.S. stock futures opened lower on Sunday.
Dow Jones Industrial Average futures fell by 110 points, or 0.3%, and both S&P 500 and Nasdaq 100 futures dipped 0.3%.
