S&P 500 futures traded 0.7% lower on Thursday morning and contracts tracking the tech-focused Nasdaq 100 lost 0.9%, echoing stock market falls across Europe as nerves about erratic White House policy appeared to grip markets once again.
It is not just tariffs on investors' minds either, as worries linger about Trump's fickle stance towards the Federal Reserve after the U.S. president lambasted Fed chair Jerome Powell for not cutting interest rates, then rowed back.
Mirroring stock markets, the brief respite for the weakened dollar has also faded, with the U.S. currency down 0.5% to $1.137 per euro, heading closer to its recent 3-1/2 year low.
More than 90% of the S&P 500 companies that have reported quarterly earnings so far have mentioned tariff risks, according to transcripts crunched by Reuters, more than doubling the rate of trade war comments from the previous earnings season.
That suggests the burst of confidence that lifted risk appetite this week could well be fragile, as businesses deter hiring and investment plans to assess how trade tensions are impacting their customers and suppliers.
Nestle, the world's largest packaged goods group, has just warned that the indirect effect of tariffs on everything from currencies to commodities prices remains unclear, sending its shares 0.7% lower despite better-than-expected quarterly sales.
On the plus side, U.S. Treasury Secretary Scott Bessent's comments on Wednesday that high tariffs between the U.S. and China are not sustainable signalled openness to de-escalating tensions between the world's two largest economies.
And even if tariff nerves have peaked, mounting U.S. slowdown signals, which strategists at BCA Research say are not fully priced into markets, are the next potential source of pessimism that could prolong bear market trends.
S&P Global's "flash" purchasing managers index for the U.S. dropped to 51.2 points for April, still in growth territory but its weakest reading since December 2023.
