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US stock futures fell as investors weighed mixed messages from the Federal Reserve and Trump’s reciprocal and additional tariffs set for April 2.
On Friday, futures attached to the Dow Jones Industrial Average (YM=F) dipped 0.4%, while benchmark S&P 500 (ES=F) futures dropped 0.4% and the tech-heavy Nasdaq Composite (NQ=F) also fell by 0.4%.
CBOT – Delayed Quote USD
As of 4:55:34 AM EDT. Market Open.
YM=F ES=F NQ=F
Markets initially rallied following the Fed’s decision on Wednesday, buoyed by the central bank staying the course for two more rate cuts this year. Federal Reserve Chair Jerome Powell also reassured investors that the economic impact of President Donald Trump’s trade war seemed manageable, adding that recession risks remain low.
Read more: The latest on Trump’s tariffs
However, by Thursday, the underbelly of the Fed’s decision started to weigh on Wall Street, sending stocks lower. The central bank had updated its projections to reflect higher inflation and lower economic growth, two concerns that have deeply rattled markets as more tariffs loom.
Some analysts also noted that the last time the Fed described inflation risks as “transitory,” as Powell did at a press conference on Wednesday, what came next was the most aggressive rate-hike campaign the US had seen in decades.
The next major deadline for Trump’s trade policy is less than two weeks away. Trump has given himself broad leeway to negotiate with countries in the meantime, adding to Wall Street’s sense that despite some reassurances this week, only more uncertainty lies ahead.
LIVE 3 updates
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The one line from Fedex’s earnings that should worry bulls
Similar to Nike’s (NKE) stock this morning, large-cap play Fedex (FDX) is getting run over pre-market to the tune of 7%.
And similar to what Nike said on its earnings call about the macroeconomic backdrop being uncertain, Fedex CEO Raj Subramaniam offered up this assessment:
“The current environment, however, is adding uncertainty to demand. We continue to work closely with our customers to help them adapt to this evolving market,” Subramaniam said.
The best the bulls can hope for is that early earnings reporters like this (and the airlines two weeks ago) sound the alarm bells loud enough on demand and their stocks get hit…leading to the bad macro news being priced in when earnings season kicks off broadly in late April.
Don’t underestimate a trade war, friends.
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Why Nike’s stock has reversed
It looked like Nike (NKE) was going to get off easy last night with its earnings report.
The Street likes new CEO Elliot Hill and and how fast he is moving to reset the company. Shares initially popped 5% after the numbers crossed the wires.
This morning the stock is down 5% despite a lot of Wall Street cheer-leading in various notes.
But investors were hit with a cold splash of reality on the earnings call: a big ship in Nike doesn’t turn overnight, especially against the backdrop of a global trade war.
Focus appears to be on Nike’s guidance for the current quarter of sales down mid-teens percentage, which came in worse than estimates. Margins will also be under pressure again due to tariffs and aggressive discounting to clear slow selling styles.
All in, I dig what Hill is doing…it will just take a lot of time before it shows up in a quarter.
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Chinese stocks extend Hong Kong losses in two-day drop
Chinese stocks dropped on Friday after a week of losses partially undoing a phenomenal rally driven by the Asian tech sector. Investor expectations are high with little to continue to fuel rocketing demand.
Bloomberg reports:
