Futures edge higher as investors assess Trump's tariff threats
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Ford, GM fall after tariff threats
Wells Fargo gains after report asset cap likely to be lifted
Futures up: Dow 0.18%, S&P 500 0.23%, Nasdaq 0.27%
Updates with quote, prices
By Johann M Cherian and Purvi Agarwal
Nov 26 (Reuters) -U.S. stock index futures inched higher on Tuesday, building ontogains, while investors assessed the implications Donald Trump's tariffs on top trade partners could have on the local economy.
The president-elect said he would impose a 25% conditional tariff on Canadian and Mexican imports that could violate a free-trade deal he negotiated during his previous term. He also outlined "an additional 10% tariff, above any additional tariffs" on imports from China.
At 6:53 a.m. ET, Dow E-minis 1YMcv1 were up 80 points, or 0.18%, S&P 500 E-minis EScv1 were up 13.75 points, or 0.23% and Nasdaq 100 E-minis NQcv1 were up 57.25 points, or 0.27%.
Automakers such as Ford F.N and General Motors GM.N -that have highly integrated supply chains across Mexico, the U.S. and Canada - lost 2.5% and 3.3%, respectively in premarket trading.
"New tariffs from the U.S. could intensify the global trade frictions and may impact the economic growth prospects in the longer term," strategists at ING bank said.
However, some analysts say that the threats might not materialise into policies.
"There has been a view among some investors that Trump's tariff talk was a negotiating tactic, a threat rather than a promise. That might still end up the case...," said Dan Coatsworth, investment analyst at AJ Bell.
Yields on Treasury bonds that had slipped in the previous session following Scott Bessent's selection as incoming Treasury secretary, rose and pressured riskier equities.
The benchmark S&P 500 .SPX touched a record high on Monday and logged its sixth-straight session of gains and a drop in yields lifted rate-sensitive sectors such as real estate .SPLRCR and regional banks .KRX.
Investors also rotated into small-cap companies, that helped the Russell 2000 index .RUT scale an all-time high on Monday, surpassing the previous record hit three years ago. On Tuesday, futures tracking the Russell RTYcv1 dropped 0.3%.
On the data front, a consumer confidence survey is due at 10:00 a.m. ET and post-noon markets will assess minutes from the central bank's meet earlier this month. However, top on the radar this week is the personal consumption expenditure report due on Wednesday.
Minneapolis Federal Reserve President Neel Kashkari, typically on the hawkish end of the U.S. central bank's policy spectrum, said he is open to cutting interest rates again next month.
Analysts say Trump's trade and fiscal policies, though seen as a positive for companies and economic growth, could stoke inflation pressures and slowdown the Fed's monetary policy easing cycle.
Traders have recently swayed in placing their bets on the central bank's move in December. The probability for a 25-basis point interest rate cut currently stands at 59.6%, as per the CME Group's FedWatch Tool.
Among others, Zoom Video Communications ZM.O lost 7.7%. The company raised its forecast for fiscal 2025 revenue and adjusted profit.
Wells Fargo WFC.N gained 2.9% after Reuters reported the bank's $1.95 trillion asset cap couldlikely be lifted next year.
Poseida Therapeutics' shares PSTX.O more than tripled in value after Switzerland's Roche ROG.S said it will acquire the cell therapy maker in a cash deal worth up to $1.5 billion.
Reporting by Johann M Cherian and Purvi Agarwal in Bengaluru; Editing by Maju Samuel
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