US Futures Slide as Trump’s Tariffs and Recession Fears Dampen Optimism

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U.S. stock futures gave up early gains during Asian trading hours on Thursday, slipping into negative territory as concerns over a potential trade war and recession fears overshadowed optimism from softer-than-expected inflation data.

Futures linked to the S&P 500 dropped 0.6% to 5,574.0 points, while Nasdaq 100 Futures fell 0.9% to 19,451.50 at 01:52 ET (05:52 GMT). Dow Jones Futures also declined by 0.4%.

Earlier, the U.S. consumer price index (CPI) report had initially sparked positive movement in the futures market, as it reinforced expectations of Federal Reserve rate cuts this year. The February CPI data showed inflation rising 2.8% year-on-year, slightly below expectations of 2.9% and lower than the 3% increase in January.

In regular trading on Wednesday, the S&P 500 closed 0.5% higher, while the Nasdaq Composite rose 1.2%. The Dow Jones Industrial Average, however, finished 0.2% lower.

The cooling inflation had initially supported equity futures during the Asian session, as investors priced in at least three rate cuts in 2025, beginning in June.

However, President Donald Trump’s decision to impose 25% tariffs on steel and aluminum imports sparked retaliatory threats from major trading partners like the European Union and Canada. This uncertainty surrounding global trade policies contributed to concerns that prolonged protectionism could harm economic growth, possibly triggering a recession.

With the Federal Reserve's policy meeting scheduled for next week, investors are awaiting further clarity on the timing of potential rate cuts.

 

 

 

 

 

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