• S&P 500 and Nasdaq futures rose Thursday morning, attempting a rebound from Wednesday’s steep losses; focus on jobless claims and Netflix earnings.
• Week-to-date: Dow/S&P 500 down over 1%, Nasdaq Composite down 2.5%, hit by tech weakness.
• US stocks slumped Wednesday (S&P -2.24%, Nasdaq -3.07%) after Fed Chair Powell’s inflation/tariff remarks and Nvidia concerns.
• Wednesday’s selloff drivers: Nvidia (-6.9% on $5.5bn charge), semiconductors (SMH -4%, AMD -7.4%), ASML miss (-7%); VIX jumped above 34.
• Premarket Thursday Movers: Eli Lilly (+11% on positive drug trial); UnitedHealth (-20% on guidance cut); TSMC (+3.4% on strong Q1); Nvidia (+0.7% rebound).
• China shifting trade retaliation focus to non-tariff barriers (export controls, probes); US weighs tariffs on Chinese ships, causing shipping disruptions.
• Diplomatic updates: Trump noted progress in Japan talks; potential EU/China willingness to negotiate reported.
• ECB cut interest rates by 25bps (to 2.25%) amid slowing growth and trade uncertainty.
• Powell warned US tariffs could hinder Fed goals; WTO slashed 2025 global trade forecast (-0.2%) due to tariffs.
• Earnings: TSMC beat Q1 estimates on AI demand but warned of tariff risks; Eli Lilly reported positive oral drug trial; UnitedHealth cut guidance on higher medical costs.
• Global Markets: Europe opened lower; Asia-Pacific markets gained (Hang Seng +1.61%, Nikkei +1.35%), diverging from Wednesday’s US drop.
• US Treasury yields edged slightly higher (10-yr ~4.30%) digesting Powell’s comments.
• Gold eased from record highs on profit-taking; Oil hit 2-week highs on supply concerns (Iran sanctions); Bitcoin rebounded.
• Market sentiment remains fragile due to trade tensions (S&P -7% since April 2); Nasdaq nears bear market; Citi cut 2025 global GDP forecast.

S&P 500 and Nasdaq-100 futures rose on Thursday, the final trading day of the week, as traders looked to recoup some of the steep losses from Wednesday’s session. Markets have remained on edge following renewed U.S. export restrictions on Nvidia, which weighed heavily on tech sentiment. The broader risk mood was also shaken by Federal Reserve Chair Jerome Powell’s remarks on inflation and tariffs, reinforcing uncertainty around the path of monetary policy.

On Thursday, investor focus turns to weekly initial jobless claims data, due in the morning, followed by earnings from Netflix after the market close. These will be closely watched for signals on both the labor market’s resilience and consumer spending patterns heading into the summer.

The Dow and S&P 500 have each fallen more than 1% so far this week, while the Nasdaq Composite has dropped 2.5%, driven by underperformance in semiconductor and large-cap tech stocks.

US Market Previous Day:

U.S. stocks slumped Wednesday, closing near session lows after Federal Reserve Chair Jerome Powell’s speech reignited concerns over inflation and the economic fallout from new trade tariffs. The S&P 500 dropped 2.24% to close at 5,275.70, while the Dow Jones Industrial Average fell 1.73%, shedding 699.57 points to finish at 39,669.39. The tech-heavy Nasdaq Composite led the decline, sinking 3.07% to 16,307.16, dragged down by a sharp selloff in semiconductor stocks.

(Source: TradingView.com)

Nvidia shares tumbled 6.9% after the chipmaker disclosed a $5.5 billion charge tied to new U.S. licensing requirements on exports of its H20 GPUs to China and other markets. The losses extended beyond Nvidia, with the VanEck Semiconductor ETF (SMH) down over 4%, AMD falling 7.4%, and Micron Technology slipping 2.4%. Adding to the pressure on chipmakers, Dutch firm ASML missed earnings expectations, sending its U.S.-listed shares down 7%.

The CBOE Volatility Index (VIX), Wall Street’s so-called “fear gauge,” surged more than 4 points to trade above 34, snapping a three-day losing streak. The index had spiked above 60 earlier this month amid intensifying tariff tensions.

US Futures Mixed:

• Dow Jones Industrial Average futures were in the red with a fall of 1.23%
• S&P 500 futures showed gains of 0.55%
• Nasdaq Composite futures attempted to rebound with gains of 0.78%

Biggest Premarket Movers

• Nvidia stock rose 0.7%, rebounding slightly after sharp losses in the previous session. The bounce comes after the chipmaker disclosed a $5.5 billion charge related to U.S. export restrictions on its H20 processors.
• Eli Lilly shares surged 11% after the company announced positive Phase 3 trial results for orforglipron, its pioneering oral drug for type 2 diabetes. The result bolstered sentiment around its innovative pipeline.
• UnitedHealth shares dropped 20% after the health insurer lowered its annual profit guidance, citing higher-than-anticipated medical costs. The warning raised broader concerns about margin pressures in the healthcare sector.
• American Express slipped 1.8%, pulling back despite beating first-quarter earnings expectations. While premium customers continued spending, the market appeared cautious about potential consumer headwinds ahead.
• Blackstone gained 2% after posting stronger-than-expected first-quarter earnings, supported by proceeds from asset sales across its private equity and credit arms.
• Truist Financial rose 1.6% as the regional bank exceeded analyst forecasts despite a year-over-year dip in profits, largely due to softness in investment banking and trading revenue.
• Bank of America edged up 1% after Phillip Capital upgraded the stock to “buy” from “accumulate,” citing strength in its investment and brokerage segments and a rebound in net interest income.
• Taiwan Semiconductor Manufacturing advanced 3.4% after the company reported a 60% year-over-year jump in net profit for the first quarter, driven by strong demand for AI-related chips.

Update on Trade Barriers:

Rather than continuing to escalate tariff measures, China is shifting its focus to alternative forms of trade retaliation. These include a suite of non-tariff restrictions such as tightening export controls on rare-earth minerals and initiating antitrust probes into U.S. firms operating in China. Analysts suggest this could mark an expansion of the trade war into services, a segment where the U.S. maintains a longstanding surplus with China. Services affected could include legal, consulting, financial, and travel-related sectors.

On the U.S. side, the Trump administration is considering tariffs on Chinese-built containerships arriving at U.S. ports. The move has already had tangible effects. Freight companies are reporting a sharp increase in canceled sailings from China to North America. The HLS Group reported 80 blank sailings from China, signaling early disruption in shipping traffic. These cancellations pose risks to U.S. ports, supply chains, and logistics firms, and may exacerbate inflationary and inventory pressures in the near term.

Despite these tensions, there are signs of diplomatic maneuvering. President Trump announced “big progress” in ongoing trade talks with Japan on Wednesday. Japan, as one of the first major partners to re-engage with the U.S. under the new tariff regime, may serve as a template for other bilateral agreements. Meanwhile, the European Commission expressed willingness to negotiate, and reports suggest China could also be open to resuming trade talks if the White House adopts a more respectful tone in its public rhetoric.

Key Economic Data/News:

The European Central Bank delivered a widely expected 25-basis-point interest rate cut on Thursday, lowering the deposit facility rate to 2.25%. This marks the latest in a series of moves to support eurozone growth amid deteriorating global trade conditions. Markets had priced in a 94% chance of the cut, according to LSEG data. The ECB’s benchmark rate had previously peaked at 4% in mid-2023. Economists attribute the decision in large part to trade-related uncertainty, driven by escalating tariffs and slowing global commerce.

In the U.S., Federal Reserve Chair Jerome Powell on Wednesday warned that Trump’s tariff policies could derail the Fed’s dual mandate of price stability and full employment. Speaking at the Economic Club of Chicago, Powell said the tariffs may “move us further away from our goals … probably for the balance of this year.” He also noted that the central bank may face a challenging situation if inflation rises while the labor market weakens. Powell’s remarks prompted renewed criticism from Trump, who called for immediate rate cuts and stated “his termination cannot come fast enough.”

The World Trade Organization also weighed in, slashing its global trade forecast. In its latest “Global Trade Outlook and Statistics” report, the WTO now expects world merchandise trade to contract by 0.2% in 2025. The downgrade factors in existing tariffs as well as the temporary suspension of reciprocal measures. The WTO cited heightened uncertainty and a broader erosion of confidence in global trade policy as key drivers behind the downward revision.

Earnings Season/Company News:

Taiwan Semiconductor Manufacturing Company (TSMC) reported first-quarter earnings on Thursday that beat analyst expectations. Net income rose 60.3% year-over-year to NT$361.56 billion ($11.1 billion), while revenue increased 41.6% to NT$839.25 billion. The results reflect strong demand for artificial intelligence chips, which has been a key growth driver. However, the company warned that Trump’s proposed tariffs could pose risks to future earnings, particularly in its global export markets.

Eli Lilly reported that its once-daily oral obesity pill, orforglipron, met primary endpoints in a late-stage clinical trial. The treatment helped patients with Type 2 diabetes reduce both blood sugar and body weight, with safety levels comparable to existing injectable therapies. The pill is seen as a potential game-changer in the weight loss and diabetes market due to its convenience and scalable production. While some metrics came in slightly below certain analyst expectations, overall results were well received. Eli Lilly shares surged 11% in premarket trading.

UnitedHealth saw its shares tumble in premarket trading after it cut its full-year profit forecast. The downgrade came as the insurer warned of higher-than-expected costs, particularly as older Americans pursue more medical services. The announcement sent ripples through the healthcare sector, with shares of CVS Health, Cigna, and Humana also under pressure as medical cost inflation continues to weigh on insurers.

Global Market Trends:

European markets opened lower on Thursday ahead of the European Central Bank’s latest monetary policy decision. The Stoxx 600 index slipped 0.5%, with losses seen across most sectors except oil and gas. The U.K.’s FTSE 100 declined 0.57%, ending a five-session rally. France’s CAC 40 fell 0.88%, while Germany’s DAX was down 0.61% after an initially positive open.

Asia-Pacific markets outperformed, diverging from Wall Street’s sharp losses following remarks by Federal Reserve Chair Jerome Powell, who highlighted risks posed by escalating trade tensions. Hong Kong’s Hang Seng Index advanced 1.61% to close at 21,395.14, while Japan’s Nikkei 225 gained 1.35% to end at 34,377.60. South Korea’s Kospi added 0.94%, and the Kosdaq jumped 1.81% following an expected rate hold by the Bank of Korea. Australia’s S&P/ASX 200 also posted gains, rising 0.78% to 7,819.10. Mainland China’s CSI 300 ended flat.

Debt Market:

(Source: TradingView.com)

U.S. Treasury yields edged higher on Thursday as investors considered the economic landscape, particularly after Fed Chair Jerome Powell highlighted concerns regarding the potential inflationary impact and growth risks stemming from White House tariffs. The 10-year yield rose by about 2 basis points to 4.296%, and the 2-year yield increased slightly, by under 1 basis point, to 3.792%.

Commodities and Other Assets:

Gold prices eased from record highs on Thursday as investors locked in profits following a strong rally driven by geopolitical and trade concerns. A modest rebound in the U.S. dollar also added pressure, making gold more expensive for foreign buyers. The dollar index recovered from near a three-year low, dampening demand. Despite the pullback, gold sentiment remains strong, with dips being actively bought. Wednesday’s 3.6% surge was fueled by President Donald Trump’s directive to investigate potential tariffs on critical mineral imports, as well as pharmaceutical and semiconductor components.

Oil prices climbed to two-week highs in low-volume trade ahead of the Easter holidays. Benchmark contracts settled 2% higher on Wednesday, supported by new U.S. sanctions targeting Iranian crude exports. The sanctions, which include measures against a China-based independent “teapot” refinery, heightened supply concerns just as gasoline and distillate inventories in the U.S. declined, according to the EIA. Despite this near-term strength, major institutions including OPEC, the IEA, Goldman Sachs, and JPMorgan have cut their demand and price forecasts, citing the disruptive impact of Trump’s tariff escalation on global trade flows.

(Source: TradingView.com)

Bitcoin rebounded Thursday after dropping to near $83,000 on Wednesday. Crypto markets found support as hopes grew that Trump may engage in negotiations with major trading partners, alleviating some macroeconomic uncertainty. Sentiment also steadied despite hawkish rhetoric from Fed Chair Powell earlier in the week.

Market Sentiment:

Financial markets remain on edge amid escalating trade tensions. Since President Trump’s “reciprocal” tariffs were first introduced on April 2, the S&P 500 has fallen approximately 7%, the Nasdaq Composite is down 7.4%, and the Dow Jones Industrial Average has dropped 6%. Although some tariffs were paused for 90 days, China was notably excluded, keeping pressure on global markets.

The Nasdaq is now nearly 19% off its recent highs, bringing it closer to bear market territory. Analysts point to deteriorating sentiment, particularly in tech and trade-sensitive sectors.

According to Citi, global economic growth is expected to slow sharply in 2025 due to the trade policy uncertainty. Chief Economist Nathan Sheets projects global GDP to rise just 2.1% this year, down from nearly 3% in 2024. The slowdown is broad-based, with weaker outlooks for the U.S., Canada, China, Japan, Mexico, India, and South Korea. Citi forecasts only a modest rebound to 2.3% in 2026, as the lingering effects of protectionist trade policies weigh on investment and global supply chains.