S&P Futures Fluctuate as Trump’s Tariffs Take Effect, FOMC Minutes in Focus

June S&P 500 E-Mini futures (ESM25) are trending up +0.05% this morning, swinging between gains and losses as U.S. President Donald Trump’s sweeping tariffs came into effect.

U.S. equity futures point to another volatile session on Wall Street. Stock index futures initially plunged after President Trump’s so-called reciprocal tariffs came into force today, intensifying concerns about their impact on U.S. economic growth. The measures include a 104% tariff on Chinese imports. Stock index futures later turned positive after China’s Ministry of Commerce stated that the nation was open to dialogue with the U.S., while noting it possessed “abundant means” to retaliate against the Trump administration’s tariffs.

In yesterday’s trading session, Wall Street’s three main equity benchmarks closed in the red. The Magnificent Seven stocks slumped, with Apple (AAPL) sliding nearly -5% and Tesla (TSLA)  falling more than -4%. Also, chip stocks retreated, with ON Semiconductor (ON) tumbling nearly -9% and Intel (INTC) dropping more than -7%. In addition, RPM International (RPM) plunged over -9% after the building materials company reported weaker-than-expected FQ3 results. On the bullish side, health insurance stocks surged following the federal government’s announcement of an estimated $25 billion increase in payments to 2026 Medicare Advantage health plans, with Humana (HUM) climbing over +10% to lead gainers in the S&P 500 and UnitedHealth Group (UNH) rising more than +5% to lead gainers in the Dow.

“The fundamental reason for the drawdown has been policy uncertainty - it’s functionally impossible to put in a bottom until that fundamental reason has been resolved, or at least until there is directional clarity on it,” said Scott Ladner at Horizon Investments.

Chicago Fed President Austan Goolsbee stated on Tuesday that tariffs are “way bigger” than he had expected, and policymakers might not be able to wait for the economic impact to be reflected in government data; instead, they should actively engage with businesses to assess the effects in real time. “We just lived through and learned what happens when inflation is raging out of control,” Goolsbee said in an interview with Illinois Public Radio. Also, San Francisco Fed President Mary Daly said the central bank has the flexibility to wait before making any interest rate adjustments as it monitors the effects of trade policy changes. “So, with growth good and policy in a good place, we’ve built the time and the ability to just tread slowly and tread carefully,” she said.

U.S. rate futures have priced in a 51.5% chance of no rate change and a 48.5% chance of a 25 basis point rate cut at May’s monetary policy meeting.

Meanwhile, market watchers are keenly awaiting the U.S. consumer inflation report for March on Thursday and the start of the first-quarter earnings season on Friday.

Today, investors will closely monitor the publication of the Federal Reserve’s minutes from the March 18-19 meeting. With expectations mounting that the Fed will support the economy by cutting rates at least four times this year, starting in June, the minutes could shed light on how justified those expectations may be.

On the economic data front, investors will focus on U.S. Wholesale Inventories data, which is set to be released in a couple of hours. Economists expect the final February figure to be +0.4% m/m, compared to the January figure of +0.8% m/m.

U.S. Crude Oil Inventories data will also be released today. Economists foresee this figure standing at 2.200M, compared to last week’s value of 6.165M.

In addition, market participants will be anticipating a speech from Richmond Fed President Tom Barkin.

On the earnings front, Delta Air Lines (DAL) is set to report its Q1 earnings results today. 

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.363%, up +2.42%.

The Euro Stoxx 50 Index is down -2.08% this morning after U.S. President Donald Trump raised trade tariffs to a 100-year high and intensified pressure on China. Trump’s reciprocal tariffs, including a 20% levy on some European Union products, went into effect today. Healthcare stocks led the declines on Wednesday after Trump said the U.S. would soon announce “a very major tariff on pharmaceuticals.” European pharmaceutical executives cautioned on Tuesday that tens of billions of dollars could flee to the U.S. unless there is a “rapid, radical policy change.” Mining and energy stocks were also among the biggest losers. Meanwhile, the European Commission is reportedly weighing retaliatory tariffs of up to 25% on a broad array of U.S. exports worth roughly 22.1 billion euros. German Finance Minister Joerg Kukies warned that Europe’s largest economy faces the risk of slipping into another recession due to escalating trade tensions. In corporate news, Redcare Pharmacy NV (RDC.D.DX) sank more than -13% after the company launched a convertible bond offering.

The European economic data slate is empty on Wednesday.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +1.31%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -3.93%.

China’s Shanghai Composite Index ended higher today amid growing speculation that authorities will implement stimulus measures to protect the economy from U.S. President Donald Trump’s tariffs. The benchmark index initially dropped sharply in the hours before Trump’s 104% tariff against China became effective around midday local time Wednesday. However, as the tariff threat materialized, investors re-entered the market, focusing on the likely response of Chinese authorities. Defense and consumer stocks gained ground on Wednesday. Semiconductor and AI-related stocks also advanced. Meanwhile, Reuters reported on Wednesday that China’s top leadership is preparing to convene a meeting to discuss steps aimed at bolstering the economy and stabilizing capital markets. Notably, Beijing has already taken sweeping measures to stabilize markets amid the latest tariffs: relaxing control over the currency, pledging loans to state funds, easing investment regulations for insurers, and deploying a coalition of state-backed funds to purchase stocks and exchange-traded funds. Premier Li Qiang reinforced confidence in China’s economic resilience, asserting that Beijing has ample policy tools to “fully offset” external shocks. Still, investors brace for volatility ahead as they await China’s retaliation against the latest U.S. tariffs, after the nation pledged to “fight to the end” and labeled the tariff escalation “a mistake on top of a mistake.” In corporate news, China Eastern Airlines surged over +6% in Hong Kong after announcing plans to speed up share buybacks.

Japan’s Nikkei 225 Stock Index closed sharply lower today, tracking overnight losses on Wall Street amid growing concerns over U.S. trade tariffs. Technology stocks led the declines on Wednesday. Export-oriented stocks also slumped amid a rally in the safe-haven Japanese yen. The benchmark index experienced significant volatility this week, surging 6% on Tuesday after a steep decline to a 1-1/2-year low on Monday. The latest drop marked the end of a short-lived rebound for Japan’s equities as U.S. President Donald Trump’s so-called reciprocal tariffs came into force, raising trade levies to their highest in 100 years. Notably, Japan now faces a 24% reciprocal tariff, bringing total tariffs on Japan up to 46%. The implementation of the levies dashed hopes for a quick resolution to the crisis, and the resulting volatility led investors to scale back their holdings of government bonds. Meanwhile, Bank of Japan Governor Kazuo Ueda stated on Wednesday that the central bank will proceed with interest rate hikes if the economy continues to recover while also pledging to closely monitor the impact of trade tensions on Japan’s economy. “The economy and prices are moving roughly in line with our forecasts made in our quarterly report. But we need to pay due attention to risks, especially recent heightening uncertainty over developments in each country’s trade policy,” Ueda said. On the economic front, the consumer confidence index in Japan fell for the fourth consecutive month in March, hitting its lowest level since March 2023. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +20.47% to 56.61.

The Japanese March Household Confidence stood at 34.1, weaker than expectations of 34.7.

Pre-Market U.S. Stock Movers

Aehr Test Systems (AEHR) rose over +1% in pre-market trading after the company posted better-than-expected FQ3 results.

Keurig Dr Pepper (KDP) gained more than +1% in pre-market trading after Piper Sandler upgraded the stock to Overweight from Neutral with a price target of $40.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Wednesday - April 9th

Delta Air Lines (DAL), Simply Good Foods (SMPL), BBB Foods (TBBB), PriceSmart (PSMT), Neogen (NEOG), Lakeland Industries (LAKE).