Wall Street Set for Lower Open As Tariff Exemption Optimism Fades

U.S. stock index futures pointed to a lower open on Tuesday, as optimism over the possibility of tariff relief for the auto sector waned on signs of new levies on pharma and semiconductor imports.

Federal Register filings showed the Trump administration was proceeding with probes into imports of pharmaceuticals and semiconductors as part of a bid to impose tariffs on both sectors.

Johnson & Johnson'sshares slipped 1.3% despite the company beating Wall Street estimates for first-quarter revenue and profit. Drugmakers such as Pfizerand Eli Lillyalso edged lower.

Trading was choppy, with index futures reversing early gains over hopes of more tarrif cuts after U.S. President Donald Trump on Monday hinted at potential exemptions for the 25% tariffs imposed on imports of autos and auto parts.

Rapid changes in U.S. policy have sparked steep market selloffs, and left investors, companies and consumers confused over the outlook for policy and economic growth.

"We had a pretty good day yesterday off not a lot of data, and we've moved pretty far since last Wednesday, it's totally natural at this point just to take a breath, maybe pull back a little bit," said Mark Hackett, chief market strategist at Nationwide.

The main indexes gained some ground on Monday after key electronics products were granted exemption from reciprocal tariffs.

Corporate results will be closely monitored over the next weeks for indications on how companies and consumers are coping with changes in trade policy.

"With all the uncertainty and all the moving parts that we have right now, it is not really in corporate management's best interest to do anything other than be cautious or provide no guidance at all, which is probably more likely," Hackett said.

Bank of Americaadvanced 1.4% after reporting a higher profit in the first quarter, while Citigrouprose 1.2% as it also reported higher profit, lifted by revenue from equities trading.

At 08:32 a.m., Dow E-miniswere down 134 points, or 0.33%, S&P 500 E-miniswere down 15.25 points, or 0.28% and Nasdaq 100 E-miniswere down 38.5 points, or 0.2%.

Among other stocks, Boeinglost 3.2% after a report said China has ordered airlines in the country to not take any further deliveries of the company's jets.

Most analysts expect markets to remain volatile, until there's more clarity on Trump's tariffs.

The S&P 500's 50-day moving average (DMA) slipped below the 200-DMA on Monday, producing a "death cross" pattern that suggests a short-term correction could turn into a longer-term downtrend.

Global investors have slashed their U.S. equity holdings over the past two months, and a record number of managers plan to keep cutting their exposure, BofA Global Research said.

The S&P 500is down 8.1% this year, while the tech-heavy Nasdaq Compositehas slumped nearly 13%.

Richmond Fed President Thomas Barkin and Fed Board Governor Lisa Cook are scheduled to speak later in the day.

Source: TradingView