U.S. stock index futures rose Thursday evening after Wall Street saw the bellwether S&P 500 slipping into correction territory, as concerns over escalating trade war and recession fears outweighed optimism from softer-than-expected inflation data.
S&P 500 Futures rose 0.5% to 5,553.0 points, while Nasdaq 100 Futures gained 0.6% to 19,359.50 points by 19.49 ET (23:49 GMT). Dow Jones Futures were trading 0.3% higher at 40,987.0 points.
This modest respite came after Senate Democratic Leader Chuck Schumer announced on Thursday that he would support the Republican-crafted stopgap funding bill to prevent a government shutdown, despite reservations within his party.
Schumer’s backing of the bill is seen as a strategic move to avoid a shutdown, which would commence at midnight on Friday when current funding expires for programs excluding Social Security, Medicare, and Medic aid.
The proposed bill was passed by the House of Representatives earlier this week.
PPI inflation cools in Feb, fails to spur optimism amid trade war
U.S. producer prices remained unchanged in February, signaling a potential easing in inflationary pressures.
The Producer Price Index (PPI) for final demand showed no movement last month, following a revised 0.6% increase in January. On an annual basis, the PPI advanced 3.2% through February, down from January’s 3.7% rise.
This data aligns with earlier reports indicating subdued consumer inflation; the Consumer Price Index (CPI) also reflected softer figures this week.
Despite these signs of moderating inflation, U.S. stock markets faced declines.
The S&P 500 closed 1.4% lower at 5,521.17 points on Thursday, entering a market correction territory, which is typically defined as a 10% fall from a recent peak.
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The Dow Jones Industrial Average fell 1.3%, and the NASDAQ Composite dropped 2%.
The market downturn is largely attributed to escalating trade tensions. Investors are concerned that such trade conflicts could reignite inflation and potentially lead the economy into a recession.
Losses in the technology sector led the broader declines.
Tesla Inc (NASDAQ:TSLA) resumed its sell-off, closing 2.4% lower, after a slight rebound in the previous session.
Meta Platforms Inc (NASDAQ:META) dropped 4.7%, while Apple Inc (NASDAQ:AAPL) lost 3.4%.
On the other hand, Intel Corporation (NASDAQ:INTC) shares surged 14.6% after the appointment of Lip-Bu Tan as its new CEO.
Trade war escalates, Trump threatens 200% tariffs on EU alcohol imports
President Donald Trump further escalated trade tensions on Thursday by threatening to impose a 200% tariff on European alcoholic beverages, including wines and champagnes, in retaliation for the European Union’s decision to levy a 50% tariff on American whiskey.
The EU’s move, effective April 1, responds to the U.S.’s recent 25% tariffs on imported steel and aluminum.
The EU’s planned tariffs target U.S. goods worth 26 billion euros, with American whiskey among the primary products affected. In response, Trump stated that if the EU’s whiskey tariff is not promptly removed, the U.S. will implement a 200% tariff on all wines, champagnes, and alcoholic products from France and other EU countries.
The proposed tariffs could lead to increased costs for consumers in both the U.S. and Europe, exacerbating already high prices.
