US stock indexes slid in premarket trading as investors awaited Federal Reserve Chairman Jerome Powell’s testimony for insights on tariffs and their potential impact on inflation in the world’s largest economy.
Most megacap and growth stocks ticked lower, while some steelmakers built on Monday’s gains following President Donald Trump’s decision to raise tariffs on steel and aluminium imports.
Later, Powell will deliver his semiannual monetary policy testimony before the Senate Banking, Housing, and Urban Affairs Committee.
According to Societe Generale analysts, “The Fed has, so far, rightly refrained from commenting on the potential implications of the new administration’s trade and immigration policies. However, the recent release of additional details on tariff measures allows Powell to further explain the Fed’s thought process.”
Market sentiment has been cautious ahead of Wednesday’s release of the January consumer price index (CPI) inflation data. Meanwhile, LSEG data indicates that traders expect at least one 25-basis-point interest-rate cut from the Fed this year, with a 60% chance of an additional cut of the same size.
In premarket trading, the Dow Jones Industrial Average fell by 0.2%, the S&P 500 dropped 0.3%, and the Nasdaq 100 declined by 0.4%.
