Wall St subdued as investors assess data, report of Trump’s tariff plans

By Johann M Cherian and Sukriti Gupta

(Reuters) -U.S. 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 rose 4.27 points, or 0.01%, to 42,530.66, the gained 4.85 points, or 0.08%, to 5,913.88 and the 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 U.S. 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 (NASDAQ:) up 0.6%, Alphabet (NASDAQ:) 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 (NASDAQ:) 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.

EBay rose 11.1% after Meta Platforms (NASDAQ:) said it will launch a test showing the e-commerce firm’s listings on Facebook Marketplace.

Edison International (NYSE:) dropped 7.8%. Its Californian subsidiary cut power to customers to prevent damage to distribution lines from a wildfire.

Quantum-computing stocks Rigetti Computing fell 48%, IonQ dropped 44% and Quantum (NASDAQ:) Computing lost 48.5% after Nvidia (NASDAQ:) boss Jensen Huang said computers based on the emerging technology are as much as 30 years away.

Markets will be closed on Thursday for a national day of mourning to mark the death of former President Jimmy Carter.

Declining issues outnumbered advancers by a 1.74-to-1 ratio on the NYSE and by a 2.61-to-1 ratio on the Nasdaq.

The S&P 500 posted four new 52-week highs and 27 new lows, while the Nasdaq Composite recorded 28 new highs and 97 new lows.