U.S. stock futures were volatile on Wednesday after the equities reversed gains on Tuesday following President Donald Trump‘s 104% tariff on China. Futures of major benchmark indices were mixed in premarket.
The White House Press Secretary Karoline Leavitt confirmed that Trump’s retaliatory 104% tariff on Chinese imports would take effect at 12:01 a.m. ET Wednesday. Her remarks triggered a sharp deterioration in market sentiment and reignited fears of a global trade escalation.
Despite growing geopolitical concerns surrounding China, a new U.S. Chamber of Commerce Foundation report highlighted by The Wall Street Journal reveals that most surveyed companies still find significant strategic advantages in staying or growing their operations there.
This finding underscores a divergence between Washington’s “selective decoupling” efforts and the deep reliance of corporate America on China’s manufacturing, workforce, and consumer base.
Major indices were significantly down from recent highs as of Tuesday’s close. The S&P 500 was 18.95% lower, the Nasdaq 100 was down 23.10%, and the Dow Jones declined 16.48%, following a week of tariff-driven selloffs.
The 10-year Treasury bond yielded 4.35% and the two-year bond was at 3.80%. However, the CME Group's FedWatch tool‘s projections showed markets pricing a 58.3% likelihood of the Federal Reserve keeping the current interest rates unchanged in its May meeting.
| Futures | Change (+/-) |
| Dow Jones | -0.06% |
| S&P 500 | 0.22% |
| Nasdaq 100 | 0.64% |
| Russell 2000 | -0.17% |
The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, were higher in premarket on Wednesday. The SPY was up 0.30% to $497.98, while the QQQ advanced 0.63% to $418.70, according to Benzinga Pro data.
Cues From Last Session:
Consumer discretionary, materials, and energy sectors led a broad decline in U.S. stocks on Tuesday, as the S&P 500 closed entirely in negative territory.
The selloff intensified after the President’s 104% tariff.
Among individual tech giants, Apple Inc. AAPL, Tesla Inc. TSLA, and Amazon.com Inc. AMZN saw significant drops, while Nvidia Corp. NVDA also traded lower.
In other news, Walgreens Boots Alliance Inc. WBA reported better-than-expected earnings, and small business optimism hit its lowest point since October 2024.
The Dow Jones index slumped 320 points or 0.84% to 37,645.59, whereas the S&P 500 index fell 1.57% to 4,982.77. Nasdaq Composite declined to end 2.15% lower at 15,267.91, and the small-cap gauge, Russell 2000, tumbled 2.73% to 1,760.71.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | -2.15% | 15,267.91 |
| S&P 500 | -1.57% | 4,982.77 |
| Dow Jones | -0.84% | 37,645.59 |
| Russell 2000 | -2.73% | 1,760.71 |
Insights From Analysts:
In this environment of heightened uncertainty, Julia Khandoshko, CEO at European broker Mind Money, advises investors to focus on capital preservation rather than chasing high returns.
“The most rational strategy in the short term is to focus on liquidity, reliable fixed-income instruments, and safe haven assets such as gold. This is not an attempt to make money but a need to preserve capital in conditions of high uncertainty,” she adds.
Even nations currently enjoying a trade surplus shouldn’t be complacent, warns Khandoshko. She points to the danger of stagflation – a damaging combination of stalled economic growth and ongoing inflation – using Japan’s long-lasting difficulties as a stark example.
The widening 3-year SOFR swap spread is signaling growing liquidity problems within the U.S. banking system, according to Ark Invest CEO Cathie Wood. She argues that this crisis necessitates swift solutions, including a trade agreement and aggressive Federal Reserve intervention, emphasizing the urgency with “No more time to waste.”
This spread, a key indicator of U.S. banking liquidity, represents the difference between the fixed rate in a SOFR-based swap and the yield on a government bond of the same maturity.
SOFR, the Secured Overnight Financing Rate, is the benchmark reflecting the cost of overnight cash borrowing used across various financial transactions, and its widening spread adds to existing concerns about emerging liquidity issues in the U.S. market.
Meanwhile, Ed Yardeni of Yardeni Research suggests that "Fixed-income investors may be starting to worry that the Chinese and other foreigners might start selling their U.S. Treasuries," after Trump levied 104% tariff duties on China after the latter's retaliation.
Adding to the market unease, credit markets are exhibiting increasing strain, evidenced by a rapidly widening yield spread between high-yield corporate bonds and the 10-year Treasury.
Data from Yardeni indicates this spread reached 407 basis points as of April 7th, signaling declining investor confidence and growing concerns about an economic slowdown or potential recession.
"The good news is that the Fed Put will probably make a quick comeback if this happens," said Yardeni.
See Also: How to Trade Futures
Upcoming Economic Data
Here’s what investors will keep an eye on Wednesday:
- February’s wholesale inventories data will be released by 10:00 a.m., and Richmond Fed President Tom Barkin will speak at 11:00 a.m. ET.
- Minutes of Fed’s March FOMC meeting will be out by 2:00 p.m. ET.
Stocks In Focus:
- Delta Air Lines Inc. DAL declined 1.11% in premarket on Tuesday before the opening bell. Analysts expect a quarterly earnings of 38 cents per share on revenue of $13.02 billion.
- Simply Good Foods Co. SMPL was up 1.45% as Wall Street expects it to report earnings of 40 cents per share on revenue of $354.43 million before the opening bell.
- Constellation Brands Inc. STZ was down 1.10% ahead of its earnings call after the closing bell. Analysts expect a quarterly earnings of $2.28 per share on revenue of $2.13 billion.
- Kura Sushi USA Inc. KRUS dropped 3.28% after posting downbeat results for its second quarter. The company also said it sees FY25 total sales of $275 million to $279 million, versus market estimates of $280.741 million.
- Aehr Test Systems AEHR climbed 1.92% after posting better-than-expected earnings and sales results for its third quarter on Tuesday.
- Redwire Corp. RDW was 2.98% higher after it announced to jointly pursue commercial lunar missions with ispace U.S., including NASA CLPS, leveraging Redwire’s space infrastructure and ispace U.S.’s lunar transportation.
- Marsh & McLennan Companies Inc. MMC jumped 17.83% as it announced the acquisition of Arthur Hall Insurance on April 2.
- Vincerx Pharma Inc. VINC plunged 52.39% after disclosing that it has terminated the previously announced non-binding Letter of Intent with Global Digital Holdings regarding a potential merger.
- Cartesian Therapeutics Inc. RNAC tumbled 36.97% after reporting 12-month data for lead cell therapy in myasthenia gravis patients.
Commodities, Gold, And Global Equity Markets:
Crude oil futures were trading lower in the early New York session by 2.59% to hover around $57.82 per barrel.
Gold Spot US Dollar advanced 2.04% to hover around $3,043.09 per ounce. Its fresh record high stood at $3,168.04 per ounce. The U.S. Dollar Index spot was lower by 0.49% at the 102.450 level.
Asian markets were mostly lower on Wednesday. Except for China’s CSI 300 and Hong Kong's Hang Seng index, India's S&P BSE Sensex, Japan's Nikkei 225, Australia's ASX 200, and South Korea's Kospi index declined. European markets were also lower in early trade.
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