U.S. stock futures indicated a mostly negative start for the market on Thursday, reflecting concerns over President Donald Trump’s latest tariff announcements, which threaten to dampen the euphoria from the previous day's Nvidia-led rally. The Dow Jones Industrial Average futures slipped by 35 points, or 0.1%, while S&P 500 futures experienced a minor decline of less than 0.1%. In contrast, Nasdaq 100 futures showed slight resilience, edging up by less than 0.1%.
In a letter released late Wednesday, President Trump announced that the U.S. would impose a significant 50% tariff on goods imported from Brazil, effective August 1. This measure represents the highest tariff level announced to date among various letters sent to different national governments. The White House justified this decision by citing legal actions against Brazil's former President Jair Bolsonaro and issues involving U.S. tech firms.
This potential market pullback follows the tech-heavy Nasdaq Composite achieving a record closing high on Wednesday, driven primarily by chip maker Nvidia. Nvidia made headlines by becoming the first company in history to reach a staggering market value of $4 trillion, surpassing both Apple and Microsoft in this remarkable achievement.
Deutsche Bank analyst Jim Reid commented on the situation in a research note, stating, “For everything else that’s happening right now, from tariffs to fiscal fears, AI is the great hope for U.S. exceptionalism to return.” He noted that the recent rally was also bolstered by lower bond yields, which alleviated some concerns regarding the fiscal climate.
On Wednesday afternoon, the Treasury auctioned off $39 billion in 10-year notes, with investors accepting a yield of 4.362%. This event led to a rally in the bond market, even as minutes from the Federal Open Market Committee's June meeting revealed divisions among officials on the timing of potential interest rate cuts.
As of early Thursday, the yield on the benchmark 10-year Treasury note was approximately 4.345%, remaining broadly unchanged from the previous day’s levels. Investors continue to monitor these developments closely, as the implications of tariffs and fiscal policy could significantly impact the stock market in the near future.
