U.S. stock futures dipped Thursday amid investor reaction to President Donald Trump’s latest tariff moves. Brazil has become the newest focus of Trump’s trade offensive, triggered by the country’s treatment of a political ally. Meanwhile, minutes from the Federal Reserve’s recent meeting reveal some officials believe interest rate cuts could be on the horizon this year. In corporate news, WK Kellogg (NYSE:KLG) shares surged in after-hours trading following reports that Ferrero is close to acquiring the cereal company.
Futures React to New Tariff Threats
U.S. futures turned lower Thursday after Trump announced plans to impose higher tariffs on Brazil, intensifying his aggressive trade stance.
At 03:42 ET, Dow futures dropped 125 points (0.3%), S&P 500 futures fell 15 points (0.2%), and Nasdaq 100 futures eased 47 points (0.2%).
The previous day’s rally was driven by Federal Reserve meeting minutes, which bolstered hopes for eventual interest rate reductions this year.
Nvidia (NASDAQ:NVDA), a leader in AI technology, gained 1.8%, briefly becoming the first company to reach a $4 trillion market cap during trading. This helped push the Nasdaq Composite to a record closing level.
According to Vital Knowledge analysts, “[T]he big driver of the recent advance is a belief that tariffs will either be watered down from the current threat levels and/or have only a benign effect on inflation while other categories of the economy […] cause prices in aggregate to move in a disinflationary direction, opening the door for the Fed to resume policy easing.”
Trump Imposes 50% Tariffs on Brazil
Despite gains, ongoing trade tensions continue to keep investors wary.
Trump announced he will impose a 50% tariff on all Brazilian imports starting August 1. The move is partially a response to Brazil’s treatment of former president Jair Bolsonaro, a political ally facing trial over an attempted coup.
In a letter to Brazil’s president Luiz Inácio Lula da Silva, Trump called Bolsonaro’s treatment “an international disgrace.”
This 50% tariff is the highest rate among several tariff letters Trump sent this week after delaying the reciprocal duty deadline to August 1 from a prior planned date.
Analysts suggest the tariff hike is politically motivated rather than driven by trade issues, as Brazil is the U.S.’s 15th-largest trading partner and an unusual net importer of American goods.
Trump also reaffirmed plans to impose a 50% tariff on imported copper, citing a national security report highlighting the metal’s importance.
Focus on Federal Reserve Minutes
Tariffs remain a significant factor in the uncertainty weighing on consumer confidence and corporate investment.
The Federal Reserve has cited tariffs as a reason for its cautious approach to cutting rates, fearing they could push inflation higher and slow economic growth.
The June Fed meeting minutes indicated only a few policymakers favored immediate rate cuts, despite Trump’s repeated criticisms of Chair Jerome Powell and calls for faster easing.
Powell has maintained a careful stance but signaled rate reductions are still possible in 2025. The minutes noted “most participants” believed easing would be suitable later this year, expecting tariff-driven price shocks to be “temporary or modest.”
WK Kellogg Shares Rally on Ferrero Acquisition News
Shares of WK Kellogg (NYSE:KLG) jumped sharply in after-hours trading after reports from the Wall Street Journal revealed Ferrero is close to acquiring the cereal maker for about $3 billion.
Sources familiar with the negotiations told the WSJ the deal could close as soon as this week if no issues arise.
Ferrero, known for brands such as Ferrero Rocher and Nutella, would gain a significant foothold in the U.S. cereal market, adding WK Kellogg’s popular products like Froot Loops and Rice Krispies.
Ferrero has been actively expanding in the U.S., previously acquiring Wells Enterprises and Nestlé’s chocolate unit.
WK Kellogg, created after Kellogg’s spin-off of its North American cereal business about two years ago, faces challenges from changing consumer habits influenced by inflation and health trends.
TSMC Beats Sales Expectations
Taiwan Semiconductor Manufacturing Co. reported a 39% rise in second-quarter sales Thursday, surpassing forecasts due to strong global demand for AI-related chips.
TSMC posted NT$933.8 billion ($31.9 billion) in April-June revenue, exceeding estimates and its own guidance range.
The strong results reflect growing worldwide demand for advanced semiconductors, especially for artificial intelligence applications.
As the world’s largest contract chipmaker, TSMC serves major clients including Nvidia and Apple.
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