Tariff Turmoil: U.S. Markets React to Trade Shifts

U.S. stock index futures declined following President Trump's temporary tariff reduction on some countries while increasing levies on China. Despite a previous day's rally, concerns over trade policies continue to challenge market stability as the Fed contemplates rate cuts amid global growth fears and potential inflation.

In a surprising reversal, U.S. stock index futures fell on Thursday after soaring the day before. The market volatility followed President Donald Trump's decision to temporarily lower tariffs on many countries, while notably increasing them on China.

This policy shift came less than 24 hours after new tariffs took effect, which had propelled the S&P 500 to its largest single-day gain since 2008 and similarly spiked the Nasdaq. The adjustment included a 90-day pause on certain tariffs, escalating those on Chinese imports from 104% to 125%, while China reciprocated with 84% tariffs on U.S. goods.

As trade tensions simmer, analysts predict further market fluctuations. Investors are keeping an eye on consumer price data and anticipating Federal Reserve rate cuts amid recession fears. Meanwhile, individual stocks, such as Tesla and General Motors, faced declines due to market instability and analyst downgrades.

(With inputs from agencies.)