US stocks reverse gains despite softer inflation data; Trump tariffs eyed By Investing.com

Investing.com — US stocks fell on Tuesday after rising earlier in the day, despite softer than expected inflation data as well as a lessening of fears of overly disruptive trade tariffs under President-elect Donald Trump. 

At 11:45 ET (16:45 GMT), the fell 0.1%, the index was down 0.3%, and the fell 0.4%. 

US PPI cooler than expected

US rose at a slower-than-anticipated rate in December, with the producer prices index increasing by 0.2% on a month-on-month basis in December, according to data released earlier Tuesday. Economists had anticipated the reading would match November’s pace of 0.4%.

Compared to a year earlier, the PPI ticked up by 3.3%, accelerating from 3.0% in the prior month but cooler than estimates of 3.5%.

This data comes ahead of Wednesday’s , and will offer more cues on interest rates after strong payrolls data from last week cemented bets on a slower pace of Fed rate cuts this year.

Trump team considering gradual tariff hike – Bloomberg 

Trump’s economic team is considering a program of gradual increases in import tariffs over the coming months, Bloomberg reported on Monday, with the proposal aimed at enhancing leverage with trading partners and preventing a sudden increase in inflation.

The plan – which has not yet been presented to Trump – involves a schedule of 2% to 5% increases in tariffs per month, and will be implemented under the executive authority of the International Emergency Economic Powers Act. 

Trump will take office on Jan. 20, and has vowed to impose steep trade tariffs on several major economies, especially China, from “day one” of his term. He vowed to impose a minimum 10% to 20% tariff on all imported goods, and a 60% tariff on China. 

Recent reports said he could also declare a national economic emergency to carry out this plan.

Fears of increased import duties had sparked increased risk aversion on Wall Street, especially as Federal Reserve officials also warned the duties could underpin inflation and keep interest rates high in the long term. 

to lead earnings season

The earnings season is also set to begin in earnest on Wednesday, with prints due from several major Wall Street banks- including JPMorgan Chase (NYSE:), Wells Fargo (NYSE:), Goldman Sachs (NYSE:) and Citigroup (NYSE:).

Elsewhere, Lululemon Athletica (NASDAQ:) stock edged higher after the athleisure company lifted its holiday outlook for earnings and revenue, while KB Home (NYSE:) stock was up 3% after the home building firm’s fourth-quarter results surpassed analyst estimates on the top and bottom line.

Crude hands back gains

Oil prices slipped lower, retreating from the four-month highs that were triggered by new US sanctions on Russian oil exports and worries over supply disruptions.

By 11:45 ET, the US crude futures (WTI) dropped over 1% to $76.33 a barrel and the Brent contract also fell 1% to $80.00 a barrel.

Oil has gained strongly over the prior two sessions after the Biden administration introduced its most comprehensive sanctions package to date, aimed at cutting into Russia’s oil and gas revenues.

These developments are expected to significantly disrupt Russian oil exports, compelling major importers like China and India to seek alternative suppliers in regions such as the Middle East, Africa, and the Americas.

(Ambar Warrick contributed to this article.)