U.S. stock index futures inched higher on Tuesday evening following a continued sell-off on Wall Street, as investors grappled with uncertainty over President Donald Trump’s fluctuating tariff policies.

S&P 500 Futures edged up 0.3% to 5,594.25 points, while Nasdaq 100 Futures rose 0.4% to 19,473.0 points by 19.49 ET (23:49 GMT). Dow Jones Futures edged 0.2% higher to 41,556.0 points.

Tariff flip-flop: Trump scraps 50% hike hours after announcement

President Donald Trump on Tuesday announced an escalation in trade tensions by declaring a 50% tariff on Canadian steel and aluminum imports, up from the existing 25%. 

This abrupt decision was in direct response to Ontario’s imposition of a 25% surcharge on electricity exports to the U.S. The heightened tariffs were intended to pressure Canada into revising its trade policies.

However, within hours, a rapid de-escalation occurred. Ontario Premier Doug Ford agreed to suspend the electricity surcharge and scheduled a meeting with U.S. Commerce Secretary Howard Lutnick in Washington. 

In response, President Trump rescinded the 50% tariff threat, reverting to the original 25% rate on Canadian metals. 

While the immediate threat of escalating tariffs was averted, investors remained cautious, recognizing that such abrupt policy shifts can have swift and significant impacts on market dynamics.

Dow, S&P 500 extend declines; CPI data awaited

In regular trading on Tuesday, the S&P 500 fell 0.8%, while the Dow Jones Industrial Average declined 1.1%. NASDAQ Composite closed 0.2% lower after slumping 4% on Monday. 

Tesla Inc (NASDAQ:TSLA) shares saw a slight rebound, rising 3.7% after a 15% drop on Monday.

President Trump showcased support for Elon Musk’s Tesla by checking out a red sedan on the White House driveway, amid backlash over Musk’s ties to his administration and government downsizing efforts.

NVIDIA Corporation (NASDAQ:NVDA) gained 1.8%, while Broadcom Inc (NASDAQ:AVGO) closed 3.1% higher.

Delta Air Lines Inc (NYSE:DAL) fell over 7% after issuing a profit warning, extending Monday’s losses. 

The airline now expects first-quarter EPS of $0.30-$0.50, down from $0.70-$1.00, with revenue growth revised to 3%-4% from 7%-9%, citing weak domestic demand and economic uncertainty.

Market participants now keenly await the crucial consumer price inflation report due this week, which will provide key insights ahead of the Federal Reserve’s interest rate decision scheduled for next week.