U.S. stock futures saw a slight decline on Friday as investors grappled with conflicting signals from the Federal Reserve and concerns over President Trump’s impending trade tariffs, set to take effect on April 2.
Futures Performance
Futures linked to the Dow Jones Industrial Average (YM=F) dropped by 0.2%. Similarly, benchmark S&P 500 (ES=F) futures fell 0.1%, and the tech-heavy Nasdaq Composite (NQ=F) lost 0.1%.
Initial Market Rally After Fed’s Decision
Markets initially responded positively to the Federal Reserve’s decision earlier this week. Investors were encouraged by the central bank’s plan for two additional rate cuts this year, along with reassurances from Federal Reserve Chair Jerome Powell. Powell suggested that the economic impact of President Trump’s trade war seemed manageable and emphasized that the risks of a recession were low.
Fed’s Updated Projections Stir Concerns
However, by Thursday, Wall Street’s optimism began to fade. The Fed’s updated projections, which showed higher inflation and lower economic growth, raised concerns. These projections deepened market unease, especially with more tariffs looming on the horizon. Analysts highlighted that the last time the Fed referred to inflation risks as “transitory,” it led to one of the most aggressive rate-hike campaigns in recent history.
Uncertainty Around Trump’s Trade Policies
The next significant deadline for Trump’s trade policy is just around the corner, with tariffs set to be imposed on April 2. The president has left room for negotiations with other countries, adding to Wall Street’s uncertainty. Despite the reassurances from the Fed this week, many investors remain cautious, fearing that more volatility and uncertainty lie ahead.
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