S&P 500 futures saw a rebound early on Friday following a tough session that pushed the benchmark index into correction territory.
Futures linked to the broad index rose by 0.56%, while Nasdaq 100 futures advanced 0.79%. Dow Jones Industrial Average futures gained 147 points, or 0.35%.
S&P 500 Officially Enters Correction Territory
The S&P 500 fell 1.4% on Thursday, bringing the index down by 10.1% from its record high set last month. This marks the official entry into correction territory, which is defined as a drop of at least 10% from a recent peak. Meanwhile, the Dow Jones Industrial Average and Nasdaq Composite each saw declines of 1.3% and about 2%, respectively, during the session.
With Thursday’s losses, the Nasdaq index has dropped over 10% this year, deepening its position in correction territory. At the same time, the Russell 2000, which focuses on small-cap stocks, has fallen around 19% from its recent high, nearing a bear market, which is defined as a 20% decline.
Impact of Tariff Uncertainty on Market Volatility
The latest market pullback highlights growing investor concerns, driven largely by President Donald Trump’s inconsistent tariff policies. This uncertainty has contributed to a rise in market volatility over the past three weeks. As a result, all three major U.S. stock indexes have dropped by more than 4% this week alone.
The Dow is heading towards its second consecutive losing week, marking its worst weekly decline since June 2022. This would also be the fourth straight week of negative performance for both the S&P 500 and Nasdaq.
Market Analysts Weigh In on the Impact of Tariffs
Adam Turnquist, Chief Technical Strategist at LPL Financial, commented, “In only a few weeks, the broader market has gone from record highs to correction territory. Tariff uncertainty has captured most of the blame for the selling pressure and is exacerbating economic growth concerns.”
Economic Data and Fed Policy in Focus
As the week wraps up, consumer sentiment data, scheduled for release Friday morning, will provide a clearer picture of economic conditions. Investors are also preparing for the Federal Reserve’s upcoming policy meeting next week, where there is a 98% probability that interest rates will remain unchanged, according to CME’s FedWatch tool.
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