(Reuters) – U.S. stock index futures sank on Thursday after President Donald Trump’s sweeping tariffs against its trading partners heightened fears of an all-out trade war that could push the global economy into a recession.
Global stocks slumped, government bonds jumped and safe-haven gold touched a record high as Trump slapped a 10% tariff on most goods imported to the United States and much higher levies on dozens of rivals.
Futures tracking the S&P 500 fell 3% by 0410 a.m. ET (0810 GMT), Dow futures dropped 2.4% while Nasdaq 100 e-minis tumbled 3.3%, led by declines in shares of megacap tech companies.
Apple sank 6.5%, hit by an aggregate 54% tariff on China – the base for much of Apple’s manufacturing. Microsoft dropped 1.8%, Nvidia slipped 3.5% and Amazon.com fell 5.1%.
“Eye-watering tariffs on a country-by-country basis scream ‘negotiation tactic,’ which will keep markets on edge for the foreseeable future,” said Adam Hetts, global head of multi-asset and portfolio manager at Janus Henderson Investors.
“We’ve seen the administration have a surprisingly high tolerance for market pain… now the big question is how much tolerance it has for true economic pain as negotiations unfold.”
Sentiment among Wall Street traders had already soured in recent weeks on worries the tariffs would hurt the U.S. economy and stoke inflation, hampering the Federal Reserve’s monetary easing cycle.
Futures tracking the U.S. small-cap Russell 2000 index tumbled 4%, underscoring concerns about the health of the U.S. economy.
Retailers were hit hard on Thursday, with Nike dropping 8.3% and Walmart 6.2% after Trump imposed a raft of new tariffs on major production hubs including Vietnam, Indonesia and China.
Wall Street’s fear gauge, the CBOE Volatility index, touched a three-week high at 25.64 points.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Saumyadeb Chakrabarty)
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