Dow Futures took a sharp dive on Friday as investors grew increasingly anxious over renewed trade war threats from President Donald Trump.
The futures of major indexes traded in red on Friday with Dow Futures plunging 300 points, while S&P 500 futures dropped by 0.72%. The futures of tech-heavy Nasdaq dropped 142.00 points and traded 0.62% lower.
The dip in futures prices came as US President Donald Trump said that his administration would begin writing letters to various nations to identify the tariff rates they would face on imports to the United States.
The introduction of these duties took place in the period of April when Trump declared a 10% tariff on the imports of almost all trading partners and planned to increase the rates of several of them in the near future.
But he soon suspended those increases until July 9 in order to provide space to pursue trade negotiations.
Dow Futures brace for market uneasiness
The uneasiness with the market sentiment has triggered a widespread sell-off in major indices on the back of the most recent tariff rhetoric and expectations on key inflation indicators.
Futures on the S&P 500 and Nasdaq declined, as concerns deepened on Wall Street ahead of the possible economic blowback on the global economy of far-reaching new tariff proposals that would affect the trading partners of the US.
Trump’s latest threat comes as America’s trading partners were hoping for an extension of the July 9 trade deadline and senior officials from the US administration also hinted at the same.
The United States signed a trade deal with Vietnam this week and is soon expected to ink a trade pact with India, but the status of similar talks with other nations remains unclear.
Bullish market sentiment
US shares were higher on Thursday, with the S&P 500 and Nasdaq Composite trading at all-time highs, as better-than-expected job numbers raised confidence in the healthfulness of the US economy as trade dynamics change and tensions build across the world.
The Dow Jones industrial average increased 344.11 points or 0.77% to finish the day at 44828.53.
The S&P 500 rose 0.83% to end at 6,279.35 and the Nasdaq rose 1.02% to close at 20,601.10.
Bureau of Labor Statistics informed that the nonfarm payroll rose by 147,000 in June, topping the forecasted economist’s figure of 110,000, and topping May revised of 144,000.
The unemployment rate also fell short to 4.1% contrary to expectations set at 4.3%.
It remains to be seen if the anxieties around the trade war will derail the ongoing bullish momentum on Wall Street, but investors will prefer to tread with caution owing to the unexpected nature of the US President.
It is to be noted that US stock markets will remain closed on Friday in observance of Independence Day.
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