U.S. stock futures showed minimal movement on Monday evening as investors analyzed recent trade developments, entering what is typically a challenging month for the equity market.
Futures for the Dow Jones Industrial Average increased by 41 points, reflecting a gain of 0.09%. Meanwhile, S&P 500 futures rose approximately 0.12%, and Nasdaq 100 futures gained 0.13%.
Trade Tariffs Legal Ruling
These fluctuations followed a federal appeals court ruling on Friday that deemed most of President Donald Trump’s global tariffs as illegal. The U.S. Court of Appeals for the Federal Circuit ruled 7-4, asserting that only Congress has the authority to impose significant tariffs. Trump criticized the decision as “Highly Partisan” and announced plans to appeal to the U.S. Supreme Court.
Aniket Shah, head of sustainability and transition strategy at Jefferies, expressed, “A Supreme Court ruling against the use of IEEPA on reciprocal tariffs would reduce the risk of broad-based tariff escalation, which is market-positive. However, short-term uncertainty may rise as some trade agreements may need to be renegotiated.”
Market Sentiment Challenges
This ruling could dampen market sentiment as the new trading month begins. Historically, September has been the weakest month for equities, with the S&P 500 experiencing an average decline of 4.2% over the past five years and more than a 2% drop on average over the last decade.
Adding to the market’s uncertainty are concerns regarding the independence of the Federal Reserve amidst the Trump administration’s attempts to remove central bank officials. A court session regarding a temporary injunction to prevent Trump from firing Lisa Cook concluded Friday without a decisive ruling. Furthermore, Stephen Miran, a Trump nominee, is scheduled for a Senate Banking Committee hearing on September 4.
Recent Performance and Upcoming Data
August proved to be a strong month for Wall Street, with the Dow Jones rising over 3%. The S&P 500 saw an almost 2% increase, while the tech-heavy Nasdaq concluded the month up by 1.6%. This marked the fourth consecutive month of gains for the S&P 500.
All eyes are now on the upcoming release of the August jobs report on Friday, which will play a crucial role in shaping the Federal Reserve’s interest rate decisions later this month.
