US Stocks Dip Amid Tariff Concerns, Powell's Testimony Awaited

US stocks opened lower on Tuesday as investors grappled with President Donald Trump's impending tariff policy shifts. At midday, the Dow Jones Industrial Average (^DJI) had lost approximately 0.2%, while the S&P 500 (^GSPC) had declined by about 0.1%. The tech-heavy Nasdaq Composite (^IXIC) had also retreated by 0.1%.

Investors remain on edge ahead of Trump's announcement of universal "like-for-like" tariffs. Earlier this week, the President imposed 25% tariffs on all steel and aluminum imports from March 12, putting pressure on key trading partners Canada and Mexico.

Concerns about the potential impact of a trade war on corporate earnings, the global economy, and inflation are weighing on investors' minds. Gold (GC=F) surged to new highs as investors sought a haven amid uncertainty.

Fed Chair Jerome Powell's two-day testimony before Congress is also being closely monitored. Powell will provide insights into the Fed's views on tariffs and their potential impact on inflation.

In his opening remarks, Powell indicated that the Fed is not in a hurry to adjust interest rates. The Consumer Price Index (CPI) for January and its wholesale counterpart are due out on Wednesday and Thursday, respectively, as inflation remains elevated.

On the earnings front, Coca-Cola (KO) shares rose after exceeding fourth-quarter profit and revenue estimates. Shopify (SHOP) stock rebounded from pre-market losses despite a downbeat first-quarter profit forecast.

Meanwhile, Meta (META) announced job cuts as part of a pivot toward acquiring AI talent.

Powell acknowledged that the SVB collapse has led to revisions in the Fed's playbook, emphasizing the need for greater focus on interest rate risk. He reiterated that the central bank does not need to rush into cutting rates, given the relatively less restrictive policy stance and a solid economic expansion.

Trump's tariffs are expected to impact US allies, including Canada and Mexico. Asian stock markets also faltered on Tuesday, reflecting concerns about the impact of tariffs on steel and aluminum.

Oil futures continued to climb, rising by 1.4%, supported by signs that US sanctions on Russian crude are impacting the country's output.