US stock futures tumbled on April 3 after President Donald Trump announced reciprocal tariffs, triggering concerns over a global trade war, thus rattling investor sentiment.
Futures linked to major Wall Street indices were deep in the red, indicating a gap-down opening for US markets.
At around 5 PM IST, the S&P 500 futures dropped 3.29 percent to 5,484.20, while Dow Jones Industrial Average futures fell 2.71 percent to 41,082.9, a decline of over 1,000 points.
The Nasdaq 100 futures, which track the tech-heavy index, slumped 3.75 percent to 18,848.3, leading the losses.
The sharp fall came despite Wall Street closing higher in the previous session. On Wednesday, the Dow Jones Industrial Average gained 235.36 points or 0.56 percent to end at 42,225.32. The S&P 500 advanced 37.90 points or 0.67 percent to 5,670.97, while the Nasdaq Composite ended 151.16 points or 0.87 percent higher at 17,601.05.
Trump’s 'Liberation Day' Tariffs Weigh on Markets
In a significant policy move, Trump announced a 10 percent tariff on all US trading partners, along with a 25 percent levy on auto imports covering cars, light trucks, engines, and other auto parts. The move, aimed at countering high tariffs imposed on American products globally, has heightened fears of retaliatory measures from key trading partners.
"This is Liberation Day, a long-awaited moment. April 2, 2025, will forever be remembered as the day American industry was reborn," Trump said during an address at the White House Rose Garden.
"Until the last minute, investors were living in the hope that the trade policy would be reasonable and pro-business,: Nicolas Forest, chief investment officer at Candriam, told Bloomberg. "Investors thought Trump would back down."
Marko Papic, chief strategist at BCA Research told Bloomberg, the US stock market could see further declines. "There is clearly more downside ahead. We could see another 10 percent drop," he added.
Global Markets React Sharply
The sell-off in US futures mirrored weakness across global equity markets. European stocks were also down, with Germany’s DAX falling 2.55 percent, the UK’s FTSE 100 declining 1.43 percent, and France’s CAC 40 losing nearly 3 percent. The European Union now faces a 20 percent reciprocal tariff on its exports to the US.
Asian markets also witnessed heavy losses. Japan’s Nikkei 225 tumbled 2.7 percent, while Hong Kong’s Hang Seng Index was down 1.52 percent.
Back home, Indian equities followed the global trend, with the benchmark Sensex falling 322.08 points or 0.42 percent to close at 76,295.36. During the session, it plunged 809.89 points or 1.05 percent to an intraday low of 75,807.55 before recovering some losses as pharma stocks advanced.
The broader NSE Nifty slipped 82.25 points or 0.35 percent to settle at 23,250.10 after hitting a low of 23,145.80 earlier in the day.
Crude oil futures on Thursday fell Rs 167 to Rs 5,957 per barrel in futures trade as participants trimmed their positions tracking weak demand in the overseas market. Meanwhile, euro rallied more than 2 percent against the dollar on Thursday. The euro gained 2.2 percent to $1.1021, while the dollar index declined 2.04 percent to 101.69.
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