March 12 (Reuters) - U.S. stock index futures rose on Wednesday, stabilizing after a tumultuous session, as investors weighed the implications of President Donald Trump's tariffs on base metal imports and also awaited a key inflation report.
With Trump's 25% protectionist tariffs on all steel and aluminum imports taking effect a month after they were announced, the European Commission vowed retaliatory levies from next month, making the EU the latest trade partner to clash with the U.S. administration.
Companies such as Ford (F.N), opens new tab, General Motors (GM.N), opens new tab, Howmet (HWM.N), opens new tab, and Honeywell , which integrate steel and aluminum within their supply chains, remained steady in premarket trading.
The financial markets have been thrown into disarray from Trump's unpredictable tariff strategy, with analysts warning of a potential capital flight from Wall Street. Concerns are rife that the new levies could fuel domestic inflation and possibly precipitate a
recession.The tech-driven Nasdaq (.IXIC), entered correction territory last week, while the benchmark S&P 500 (.SPX), narrowly avoided confirming a 10% decline from its February peak in the previous session.
"The escalation of tariff hostilities and re-rating in tech sector valuations is causing contagion from stocks to credit in a way not observed in a while and is stoking fears that the economy could veer off the tracks," Societe Generale analysts said.
The uncertainty has led businesses to scale back investments and adjust forecasts downwards. Delta (DAL.N), opens new tab, Kohl's (KSS.N), opens new tab, and Walmart (WMT.N), are among the latest companies to announce forecast cuts.
Goldman Sachs became the first brokerage to lower its 2025-end target for the benchmark index to 6,200 from 6,500, while J.P.Morgan sees a roughly 40% risk of recession, up from a 30% chance at the start of the year.
At 07:03 a.m. ET, Dow E-minis were up 208 points, or 0.50%, S&P 500 E-minis were up 40.75 points, or 0.73%, and Nasdaq 100 E-minis were up 171.25 points, or 0.88%.
The upcoming Consumer Price Index data for February is due to be released at 8:30 a.m. ET. Economists expect the report to indicate cooling inflation compared to the previous month. However, they also say the impact of tariffs may become evident in future data releases.
Interest-rate futures point to the U.S. Federal Reserve keeping borrowing costs unchanged until June at its meeting next week. However, traders expect that signs of economic weakness could force the central bank to deliver at least 75 basis points worth of rate cuts by December.
Among top movers, Intel (INTC.O), jumped 8.5% in premarket trading after a report said TSMC (2330.TW), has pitched Nvidia, Advanced Micro Devices and Broadcom about taking a stake in a joint venture to operate the U.S. chip company's factories.
Nvidia (NVDA.O), rose 2.4%, Advanced Micro Devices (AMD.O), added 1.2% and Broadcom (AVGO.O), gained 1.7%.
Walmart dipped 0.1% following a meeting of Chinese officials and its representatives earlier this week. The company had asked suppliers in China to slash prices to offset U.S. tariffs, state media said.
The Republican-controlled U.S. House of Representatives passed a stopgap bill to keep federal agencies funded beyond Friday, giving markets a breather.
Reporting by Johann M Cherian and Pranav Kashyap in Bangalore; Editing by Pooja Desai
