U.S. stock futures fell as Wall Street braced for steep tariffs that President Trump is set to impose on major U.S. trading partners starting Wednesday.
Futures tied to the S&P 500 ( ES=F ) fell 1.8%, while futures tied to the tech-heavy Nasdaq ( NQ=F ) fell 1.9%. Dow Jones Industrial Average futures ( YM=F ) fell 1.5%.
Trump’s so-called “reciprocal” tariffs — announced last week and shocking markets — took full effect at 12:01 a.m. Wednesday. The tariffs continue to sow chaos on Wall Street, with stocks on another roller-coaster ride that ended in sharp declines. The S&P 500 ( ^GSPC ) is close to a bear market, while the Nasdaq Composite ( ^IXIC ) and Dow Jones ( ^DJI ) closed at their lowest levels since January 2024.
China will face tariffs of up to 104%, while Vietnam, Japan, India and other countries will also face significant tariff increases. Most US trading partners already face a “basket” tariff of at least 10%, which took effect last weekend.
The escalating trade war between the US and China took center stage on Tuesday. China vowed to “fight to the end” if necessary, while the White House confirmed plans to increase tariffs on China to 104%, making good on Trump’s threat after China hit back.
However, traders saw some other signs of optimism that sent stocks soaring early Tuesday. US Treasury Secretary Scott Bessant said on Tuesday that he believes “we can make some good deals in the end.” Japan, which faces a 24% tariff, appears to be the first mover in the negotiations. Trump also praised the upcoming talks with South Korea after he had a “very good call” with the country’s acting prime minister.
Meanwhile, the first-quarter earnings season officially kicked off this week, with Delta Air Lines (DAL) under close scrutiny on Wednesday after the company cut its earnings guidance last month due to economic uncertainty. Investors are also bracing for the release of the consumer price index on Thursday, which will provide a signal on where inflation is headed before Trump’s tariffs take full effect.
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