Wall Street indexes traded down in the early hours amid growing worries that the chaotic and unpredictable Trump administration could launch a wider trade war, halting global economic growth and pushing the U.S. economy towards a recession.

The S&P 500 index decreased 0.1%, and the Nasdaq Composite declined 0.3% after the latest salvo of Trump tariffs targeted steel and aluminum imports. 

The latest 25% tariffs on steel and aluminum product imports appear to be driven by motivation to force two neighbors, Canada and Mexico, to toe the White House's line and have little basis in trade economics or the need of the U.S. consumers.

The latest version of the announced tariff will cover steel and aluminum shipments from all countries, including key suppliers, Brazil, South Korea, China, Japan, and the European Union. 

The European Union said it plans to announce its retaliatory tariffs in the near future, and other countries are also looking for ways to impose their retaliatory measures.

European Union Commission President Ursula von der Leyen said in a statement released on Monday, “Unjustified tariffs on the EU will not go unanswered—they will trigger firm and proportionate countermeasures.”

The growing prospects of a wider trade war are also going to be on the minds of lawmakers as Federal Reserve Chairman Jerome Powell is scheduled to appear before the Senate Banking Committee later today and the House Financial Services Committee on Wednesday.

Fed Chair Powell's testimony will start at 10:00 a.m. for both appearances. 

The ever-widening set of tariffs and the expanding set of trade partners covered by higher trade barriers is certainly going to stoke inflation, making the Fed policymakers job harder. 

The Federal Reserve is likely to hold off on any imminent rate cuts in the near future until solid evidence emerges that inflation is still on a sustainable downward slide towards the 2% target rate.

U.S. Stock Movers 

Vertex Pharmaceuticals Inc. dropped 0.4% to $467.98 after the biotech company posted lower income in the fourth quarter ending in December.

Astera Labs Inc. dropped 4.5% to $98.65 despite the provider of fabric switches for artificial intelligence products reporting strong fourth-quarter sales and profit growth.

Lattice Semiconductor Corp. surged 13.9% to $62.04 despite the maker of low-power field-programmable gate arrays reporting weak fourth-quarter results.

The stock jumped in trading because the company's revenues were ahead of some investors' estimates. 

Coca-Cola Company jumped 6.8% to $66.97 after the beverage maker's fourth quarter revenue and earnings surpassed market expectations, driven by higher prices and a slight increase in case volumes.