Key Events

Stocks looked set to pare back some of their recent losses as investors weighed up whether the U.S. tariffs that took hold Tuesday would kick-start a full-on trade war.

President Donald Trump’s levies against China, Canada, and Mexico took hold Tuesday, and Beijing and Ottawa wasted no time in hitting back. China’s finance ministry said it would impose duties on U.S. agricultural products including chicken and wheat, and Canada’s Prime Minister Justin Trudeau pledged to retaliate with levies on about $100 billion of imports.

Investors were expecting more, judging by premarket action–U.S. equities were on course to tick up, having plunged Monday after Trump doubled down on his tariff plans.

“There is still some market doubt as to whether all these tariffs will persist for a prolonged period of time…But we are clearly into unprecedented territory,” said Deutsche Bank strategist Jim Reid. He added that markets were relieved that China and Canada “haven’t gone further so far.”

Futures tracking the Dow Jones Industrial Average and the S&P 500 broadly flat, while Nasdaq 100 futures rose 0.1%.

The yield on the benchmark 10-year U.S. Treasury note ticked up 1 basis point to 4.168%, and the WSJ Dollar Index–a gauge tracking the buck against 16 other currencies–slid 0.2%.