NEW YORK: US stocks were muted on Wednesday, as uncertainty prevailed on Wall Street after the release of two conflicting sets of jobs data and a report that said President-elect Donald Trump was mulling a national economic emergency declaration.
At 11:56 a.m. ET, the Dow Jones Industrial Average rose 4.27 points, or 0.01%, to 42,530.66, the S&P 500 gained 4.85 points, or 0.08%, to 5,913.88 and the Nasdaq Composite lost 1.07 points, or 0.01%, to 19,487.57.
The Russell 200 index tracking domestically focused small-cap companies dropped 1%.
Market sentiment was fragile after a CNN report said Trump was mulling on building the new tariff program by using the International Economic Emergency Powers Act, which authorizes a president to manage imports during a national emergency.
Ahead of Trump taking office later in the month, reports around potential surcharges on US trade partners have kept investors on edge on concerns that his policies including mass deportations and tariffs could spark a global trade war and stoke inflation pressures.
Eight of the 11 S&P 500 sectors edged up, led by a 0.3% rise in healthcare, although elevated Treasury yields limited gains.
Megacaps were mixed with Microsoft up 0.6%, Alphabet flat and Meta falling 1%.
Investors also assessed an ADP National Employment Report that showed private payrolls growth slowed sharply in December, although a separate Labor Department report said jobless claims for the previous week fell.
“If wider tariffs are implemented it could have a short-term impact on inflation that may or may not be offset by the cuts in government spending,” said Thomas Hayes, chairman at Great Hill Capital LLC.
“The Fed will sit back and see if he (Trump) does enact punitive tariffs and if he does, how much of that potential inflationary impact will be offset by the cuts in government spending.”
A broadly healthy labor market is allowing the Fed to stay put on interest rates and traders now expect the first trim this year in either May or June, according to the CME Group’s FedWatch Tool.
Fed Governor Christopher Waller said inflation should continue falling in 2025 and allow the central bank to further reduce interest rates, though at an uncertain pace.
Minutes from the Fed’s December meeting is due at 2:00 p.m. ET.
Worries about higher inflation following upbeat economic data weighed on the benchmark S&P 500 and the tech-heavy Nasdaq on Tuesday, when the indexes logged their biggest daily declines since the Fed’s December meeting in which the central bank issued a cautious stance on upcoming interest rate cuts.
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