Stock Index Futures Slip on Tariff Uncertainty Ahead of U.S. PCE Inflation Data
June S&P 500 E-Mini futures (ESM25) are down -0.20%, and June Nasdaq 100 E-Mini futures (NQM25) are down -0.32% this morning as market participants remain cautious amid uncertainty surrounding U.S. tariffs while also awaiting the release of the Federal Reserve's first-line inflation gauge.
Investors have been paring back risk ahead of April 2nd, when U.S. President Donald Trump is set to unveil so-called 'reciprocal tariffs' that risk escalating the trade war and hurting the global economy. Deutsche Bank analysts said in a note that there are indications investors are growing more worried about the possibility of stagflation in the U.S. due to tariffs.
In yesterday's trading session, Wall Street's major indices ended lower. Automakers sank after U.S. President Donald Trump imposed a 25% tariff on auto imports starting next week, with General Motors (GM) slumping over -7% to lead losers in the S&P 500 and Ford Motor (F) falling more than -3%. Also, AppLovin (APP) plummeted over -20% and was the top percentage loser on the Nasdaq 100 after Muddy Waters Research issued a short report against the company. In addition, Advanced Micro Devices (AMD) slid more than -3% after Jefferies downgraded the stock to Hold from Buy. On the bullish side, Dollar Tree (DLTR) surged over +11% and was the top percentage gainer on the S&P 500, adding to Wednesday's +3% gain after selling its Family Dollar business to Brigade Capital Management and Macellum Capital Management for about $1 billion.
The U.S. Bureau of Economic Analysis said Thursday that the Q4 GDP growth estimate was revised upward to +2.4% (q/q annualized) in its final print, stronger than expectations of no change at +2.3%. Also, the number of Americans filing for initial jobless claims in the past week unexpectedly fell -1K to 224K, compared with the 225K expected. In addition, U.S. pending home sales rose +2.0% m/m in February, stronger than expectations of +0.9% m/m.
'The monthly jobs report may paint a different picture, but [yesterday's] jobless claims number suggests the labor market is still on solid ground. For markets, though, the question is whether anything will be able to rise above the noise of the tariff story,' said Chris Larkin at E*Trade from Morgan Stanley. 'In the near-term, the most likely scenario is more choppy trading,' he added.
Richmond Fed President Tom Barkin said on Thursday that swift policy changes by the Trump administration have created 'a sense of instability' among businesses, and the accompanying fall in sentiment could 'quiet demand.' With a robust labor market and inflation still running high, the Fed's 'moderately restrictive' stance is a 'good place to be,' Barkin noted. Also, Boston Fed President Susan Collins said it seems 'inevitable' that tariffs will fuel inflation, at least in the short term, adding that holding interest rates steady for an extended period is likely appropriate.
Meanwhile, U.S. rate futures have priced in an 88.4% chance of no rate change and an 11.6% chance of a 25 basis point rate cut at the May FOMC meeting.
Today, all eyes are focused on the U.S. core personal consumption expenditures price index, the Fed's preferred price gauge, which is set to be released in a couple of hours. Economists, on average, forecast that the core PCE price index will stand at +0.3% m/m and +2.7% y/y in February, compared to the previous figures of +0.3% m/m and +2.6% y/y.
U.S. Personal Spending and Personal Income data will also be closely monitored today. Economists anticipate February Personal Spending to be +0.5% m/m and Personal Income to be +0.4% m/m, compared to January's figures of -0.2% m/m and +0.9% m/m, respectively.
The University of Michigan's U.S. Consumer Sentiment Index will be released today as well. Economists estimate this figure at 57.9 in March, compared to 64.7 in February.
In addition, market participants will be anticipating a speech from Atlanta Fed President Raphael Bostic.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.339%, down -0.69%.
The Euro Stoxx 50 Index is down -0.28% this morning as investors digest a slew of economic data from the region as well as the Trump administration's latest tariffs. Technology stocks lost ground on Friday. The benchmark index is on track to end the week lower. Data from the Office for National Statistics released on Friday showed that British monthly retail sales unexpectedly grew in February, supported by increased spending on clothing and stronger demand for gold jewelry. Separately, a survey showed that German consumer sentiment improved marginally heading into April. In addition, preliminary data from the statistics agency Insee showed that France's annual inflation rate remained unchanged at 0.8% in March. Meanwhile, investor sentiment remains subdued after U.S. President Donald Trump announced a 25% tariff on auto imports, set to take effect next week. The European Union is also bracing for Trump's reciprocal tariffs, set to be announced next week, and is considering deploying one of its strongest trade-policy tools, the so-called anti-coercion instrument, as a potential retaliatory measure. In corporate news, Ubisoft (UBI.FP) climbed over +9% after the French video game company announced it had established a subsidiary that will receive a 1.16 billion euro ($1.25 billion) investment from China's Tencent.
U.K.'s GDP, U.K.'s Retail Sales, France's CPI (preliminary), Germany's Germany's GfK Consumer Climate Index, Germany's Unemployment Change, Germany's Unemployment Rate, and Spain's CPI (preliminary) data were released today.
U.K. GDP has been reported at +0.1% q/q and +1.5% y/y in the fourth quarter, compared to expectations of +0.1% q/q and +1.4% y/y.
U.K. February Retail Sales came in at +1.0% m/m and +2.2% y/y, stronger than expectations of -0.3% m/m and +0.5% y/y.
The French March CPI arrived at +0.2% m/m, weaker than expectations of +0.3% m/m.
The German April GfK Consumer Climate Index stood at -24.5, weaker than expectations of -22.6.
The German March Unemployment Change came in at 26K, weaker than expectations of 10K.
The German March Unemployment Rate was 6.3%, weaker than expectations of 6.2%.
The Spanish March CPI arrived at +2.3% y/y, weaker than expectations of +2.6% y/y.
Asian stock markets today settled in the red. China's Shanghai Composite Index (SHCOMP) closed down -0.67%, and Japan's Nikkei 225 Stock Index (NIK) closed down -1.80%.
China's Shanghai Composite Index closed lower today as concerns over upcoming U.S. tariffs and an escalating trade war weighed on investor risk appetite. Consumer and energy stocks led the declines on Friday. The benchmark index ended the week flat. Having digested U.S. President Donald Trump's 25% tariffs on car imports, investors are now gearing up for the implementation of so-called 'reciprocal tariffs' on April 2nd. Meanwhile, Trump's auto and reciprocal tariffs will come on top of the 20% levies already imposed on Chinese goods, further escalating trade tensions. Still, the U.S. president said earlier this week that China could receive a tariff reduction as part of a deal to sell ByteDance's social video platform TikTok to an American company. Morgan Stanley analysts, led by Laura Wang, said in a note on Friday that sentiment toward mainland Chinese stocks cooled with lower trading volumes. 'We expect higher volatility amid tariff uncertainty but believe green shoots on earnings and liquidity warrant further index upside towards year-end,' they said. Investor focus is also on China's official manufacturing PMI reading for March, scheduled for release on Monday. Activity in China's huge manufacturing sector likely grew in March despite U.S. tariff headwinds, partly due to Beijing's stimulus efforts. In corporate news, Nio plunged over -7% in Hong Kong following the electric vehicle maker's $518 million share placement.
Japan's Nikkei 225 Stock Index closed sharply lower today, hitting a 2-week low as worries about the potential impact of U.S. President Donald Trump's tariffs dampened sentiment. Also, Japanese equities slumped partly because Friday marked the ex-dividend date for most companies at the fiscal year-end. Automobile stocks led the declines on Friday, extending yesterday's losses after President Trump announced a 25% tariff on U.S. auto imports. Financial stocks also underperformed. The benchmark index posted a weekly loss. Government data released on Friday showed that core consumer inflation in Japan's capital accelerated in March due to rising food prices, keeping the Bank of Japan on course for gradual interest rate increases. Meanwhile, a summary of opinions from the Bank of Japan's March meeting released on Friday revealed that policymakers were divided this month over how soon to raise interest rates again, with some emphasizing domestic inflationary pressures and others highlighting uncertainty surrounding the U.S. tariff policy. 'The bank will need to be particularly cautious when considering the timing for raising the policy interest rate,' the summary quoted one board member as saying. In other news, Japan's Prime Minister Shigeru Ishiba said on Friday that President Trump's decision to impose an additional 25% tariff on U.S. auto imports could severely affect the Japanese economy, and he vowed to take measures to safeguard the country's industries and jobs. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +2.24% to 22.35.
The Japanese March Tokyo Core CPI came in at +2.4% y/y, stronger than expectations of +2.2% y/y.
Pre-Market U.S. Stock Movers
Lululemon Athletica (LULU) plunged over -10% in pre-market trading after the yogawear brand reported weaker-than-expected Q4 comparable sales and issued disappointing FY25 guidance.
Argan (AGX) surged more than +12% in pre-market trading after reporting better-than-expected Q4 results.
Today's U.S. Earnings Spotlight: Friday - March 28th
SBC Medical Holdings (SBC), Humacyte (HUMA), China Automotive (CAAS), So-Young (SY).
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Globe and Mail
34 minutes ago
- Globe and Mail
Stocks Set for Muted Open With Focus on U.S.-China Trade Talks, U.S. Inflation Data Awaited
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39 minutes ago
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U.S. and China are holding trade talks in London after Trump-Xi phone call
Stacked containers are seen at the Yangluo Port on the Yangtze River in Wuhan, central China's Hubei Province, Friday, May 23, 2025. (AP Photo/Andy Wong) LONDON — High-level delegations from the United States and China are meeting in London on Monday to try and shore up a fragile truce in a trade dispute that has roiled the global economy, A Chinese delegation led by Vice Premier He Lifeng is due to meet U.S. Commerce Secretary Howard Lutnick, Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer at an undisclosed location in the city. The talks are due to last at least a day. They follow negotiations in Geneva last month that brought a temporary respite in the trade war. The two countries announced May 12 they had agreed to a 90-day suspension of most of the 100%-plus tariffs they had imposed on each other in an escalating trade war that had sparked fears of recession. Since then, the U.S. and China have exchanged angry words over advanced semiconductors that power artificial intelligence, 'rare earths' that are vital to carmakers and other industries, and visas for Chinese students at American universities. President Donald Trump spoke at length with Chinese leader Xi Jinping by phone last Thursday in an attempt to put relations back on track. Trump announced on social media the next day that trade talks would be held on Monday in London. The U.K. government says it is providing the venue and logistics but is not involved in the talks. 'We are a nation that champions free trade and have always been clear that a trade war is in nobody's interests, so we welcome these talks,' the British government said in a statement. The Associated Press
Globe and Mail
an hour ago
- Globe and Mail
Carney to announce Canada's defence spending will hit NATO's target of 2% of GDP this fiscal year, sources say
Prime Minister Mark Carney is set to announce what his government is billing as the largest increase in defence spending since the Second World War, measures that sources say would enable Canada to meet NATO's 2-per-cent military expenditure target this fiscal year, well ahead of any previously announced schedule. Two senior government sources told The Globe and Mail that Mr. Carney will unveil a new security and defence investment plan during a Monday speech at the University of Toronto's Munk School of Global Affairs. It will commit the government to rapidly procuring the equipment and technology needed to protect Canada, assert the country's sovereignty and meet its obligations to the North Atlantic Treaty Organization, the sources said. The Globe is not identifying the sources, as they were not authorized to speak publicly on the matter. For years, NATO member countries have agreed they should spend the equivalent of 2 per cent of gross domestic product on defence. 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At The Hague gathering, member countries are expected to raise the Western alliance's military spending target to 3.5 per cent of GDP, plus another amount equivalent to 1.5 per cent for security-related investments. The sources said the new spending will include higher pay for members of the Canadian Armed Forces; new aircraft, armed vehicles and ammunition; new drones and more sensors to monitor the seafloor and the Arctic; repair and maintenance commitments for existing ships, aircraft and other assets; more health care funding for Forces personnel; and funding to boost the Canadian Coast Guard's reach and capabilities. There will also be commitments to increase Canada's defence industry capacity as well as capabilities in artificial intelligence, cyber, quantum and space technologies, the sources said. The expedited effort to meet the NATO 2-per-cent target this fiscal year represents a marked change from as recently as 12 months ago, when then-prime minister Justin Trudeau announced it would take Canada until 2032. He also publicly criticized the target as a 'crass mathematical calculation' that didn't properly account for a country's contributions to NATO. During the recent federal election campaign, Mr. Carney's Liberals pledged to accelerate efforts and reach the 2-per-cent threshold by 2030. The government will provide dollar figures for the announcement on Monday, the sources said. Canadian experts have previously estimated Ottawa would require $15-billion to $20-billion in additional annual military spending to reach the 2-per-cent target. NATO to back 5% spending target in June, Secretary-General says One persistent problem Canada has faced in acquiring new military equipment is a slow and unwieldy procurement process. Mr. Carney's Liberals in the recent election campaign promised to create a stand-alone defence purchasing agency to speed up military equipment procurement, and to prioritize buying Canadian gear and materials whenever possible. It's also expected that the Canadian Coast Guard, currently a civilian operating agency under the Department of Fisheries and Oceans, will be moved under the Department of National Defence. (The move would mirror the U.S. Coast Guard, which is a branch of the U.S. Armed Forces.) The Canadian Coast Guard's annual budget is about $2.5-billion, a small fraction of the Department of National Defence's yearly spending, which exceeds $41-billion. It's not clear whether moving the Coast Guard under the Canadian military would change it from a civilian fleet to a military fleet. The defence spending will also support key capabilities, including the Arctic over-the-horizon radar system investment announced in March, a counter-drone program, joint support ships, long-range precision strike weapons, increased domestic ammunition production and additional armoured vehicles, among other priorities, the sources said. U.S. ambassador to NATO says the military alliance must outspend Russia on defence Monday's new commitment may not be enough for allies, including the United States under Mr. Trump. Over the past two decades, an agreement among NATO countries to reach the 2-per-cent target has evolved from a guideline to the minimum acceptable obligation. Moscow's all-out-assault on Ukraine – the first large-scale land war in Europe since the Second World War – has reignited fears of Russian expansionism and driven many NATO countries to make historic increases in defence spending. NATO's top civilian official, Secretary-General Mark Rutte, said recently he expects leaders of member countries at the coming summit to agree to raise military spending and related security expenditures to 5 per cent of GDP. 'Strong defences send a clear message – no one should ever think of attacking us,' Mr. Rutte said in a speech in Brussels on Wednesday. He told reporters later that 'if we think that we can keep ourselves safe sticking with the 2 per cent, forget it.'
