US Stocks Trade Sideways Amid Concerns Over New Political And Trade Map Of The World

(MENAFN- Investor Ideas) Investorideas, a go-to platform for big investing ideas releases market commentary from Samer Hasn, Senior Market Analyst at XS

The US Stock market is set for a negative open with S&P 500 E-mini futures down about 0.3% in early trading. Since hitting a record high on January 24, the index has been stuck between 6,100 and 5,970 points.

The lackluster performance of the stock market comes amid concerns about the implications of US foreign and trade policy towards its allies and enemies. Potential price hikes, disruptions to supply chains and the labor market, and global geopolitical uncertainty are among the main concerns for investors.

These concerns were exacerbated by Donald Trump's announcement that he would impose a 25% tariff on all iron and steel imports into the United States. The move has exacerbated concerns about the implications of the trade war and its scope.

Axios quoted experts as saying that these tariffs could cause steel and aluminum prices to rise by 20% before they decline, and that they could be reflected in increasing the burden on consumers by $8 billion annually. While the automotive, machinery, aircraft, packaging, and energy infrastructure industries will be among the most affected by these tariffs, according to multiple reports.

These tariffs could also have a profound impact on American industry and may not be limited to rising prices only. The Wall Street Journal Editorial Board criticized Trump's decision and said that it would make American companies less competitive internationally, in addition to causing retaliatory measures that would harm these companies.

Editorial Board also cited what happened when similar tariffs were imposed during Trump's first term, which led to harm to some American companies, including Ford - whose stock reached its lowest level since 2021 yesterday - in addition to job losses.

Uncertainty over Trump's trade policy, immigration policy and federal spending cuts are also contributing to the sideways performance of the U.S. stock market, according to a separate report in The Journal based on a series of surveys, data and interviews.

Moreover, Trump's confrontational policies with his allies and softer ones with his enemies threaten the United States' global standing, which ultimately plays into the hands of Russia and China, The Washington Post Editorial Board wrote in an opinion piece.

The trade escalation is likely to keep the Fed's monetary policy in tightening territory for longer and further pressure a stock market already grappling with uncertainty over the aforementioned factors. Investors are divided over the possibility of a rate cut in June, which is now less likely than before, with the first rate cut of the year. The probability that the Fed will hold rates at the current range is 49.5%, up from 36% a week ago, according to the CME FedWatch Tool.

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