The major U.S. index futures on the Dow Jones, S&P and Nasdaq are currently pointing to a sharply lower open on Thursday, with stocks likely to see an initial sell-off amid concerns about a global trade following President Donald Trump’s tariff announcement.
The steep drop by the futures comes after Trump delivered a highly anticipated speech from the White House Rose Garden on Wednesday outlining his plan to impose sweeping tariffs on U.S. trade partners.
Trump’s “reciprocal tariff” plan calls for a baseline 10 percent tariff to be imposed on all U.S. imports except those compliant with the United States-Mexico-Canada Agreement.
Certain countries deemed the “worst offenders” will face much higher tariffs, with countries like Cambodia, Laos, Madagascar and Vietnam set to be charged nearly 50 percent.
China, which will face a 54 percent tariff rate when the new levies are combined with existing duties, has vowed to take countermeasures.
Canada and the European Union are also preparing countermeasures, leading to concerns about a trade war that could fuel inflation and damage the global economy.
On the trade front, the Commerce Department released a report showing the U.S. trade deficit narrowed in the month of February after soaring to a record high in January.
Stocks once again recovered from an early slump to end Wednesday’s trading mostly higher, adding to the gains posted in the previous session. The major averages climbed well off their lows to end the day firmly in positive territory.
The major averages gave back ground in early afternoon trading but moved back to the upside going into the close. The Nasdaq advanced 151.16 points or 0.9 percent to 7,601.05, the S&P 500 climbed 37.90 points or 0.7 percent to 5,670.97 and the Dow rose 235.36 points or 0.6 percent to 42,225.32.
The early weakness on Wall Street came amid concerns about the impact of Trump’s reciprocal tariffs on U.S. trade partners.
However, as was seen in the two previous sessions, traders seemed to see the early slump as an opportunity to pick up stocks at reduced levels, leading to the subsequent rebound.
In U.S. economic news, payroll processor ADP released a report showing private sector employment in the U.S. increased by more than expected in the month of March.
ADP said private sector employment jumped by 155,000 jobs in March after climbing by an upwardly revised 84,000 jobs in February.
Economists had expected private sector employment to grow by 105,000 jobs compared to the addition of 77,000 jobs originally reported for the previous month.
The Commerce Department also released a separate report showing factory orders increased by slightly more than anticipated in the month of February.
Airline stocks moved sharply higher over the course of the session, with the NYSE Arca Airline Index surging by 2.3 percent after ending Tuesday’s trading at its lowest closing level in over six months.
Significant strength also emerged among networking stocks, as reflected by the 1.8 percent jump by the NYSE Arca Networking Index.
Banking, retail and housing stocks also saw notable strength on the day, moving higher along with most of the other major sectors.
Dow Jones, S&P, Nasdaq, Trade War Concerns May Spark Early Sell-Off On Wall Street
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