U.S. Futures Dip as Trump Tariffs Reinstated, Investors Eye PCE Inflation Data

U.S. stock index futures edged lower early Friday as investors digested the surprise reinstatement of President Donald Trump’s sweeping trade tariffs and braced for the release of key inflation data that could influence the Federal Reserve’s interest rate outlook.

At 05:30 ET (09:30 GMT), Dow Jones Futures were down 35 points, or 0.1%, S&P 500 Futures slipped 7 points, or 0.1%, and Nasdaq 100 Futures fell 0.2%.

The renewed trade uncertainty and looming economic data marked a cautious end to what has otherwise been a strong month for Wall Street. The S&P 500 is on track for a gain of over 6% in May, the Nasdaq Composite is up around 10%, and the Dow Jones Industrial Average has climbed roughly 4%.

Tariff Reinstatement Fuels Market Caution

Investor sentiment took a hit after an appeals court on Thursday reinstated most of Trump’s tariffs, reversing a trade court decision from just the day before that had ordered their immediate suspension. The move injects fresh legal and policy uncertainty into global trade dynamics, with the next hearing now scheduled for June 5.

The tariff saga, already a key source of economic anxiety this year, is further clouded by news that U.S.-China trade talks have stalled. U.S. Treasury Secretary Scott Bessent hinted that President Trump may need to personally intervene to break the deadlock, raising the stakes as markets eye the potential impact on global growth.

Inflation in Focus with PCE Data Ahead

The market’s next major test comes with the release of the April Personal Consumption Expenditures (PCE) price index—considered the Federal Reserve’s preferred measure of inflation. Economists expect the core PCE, which strips out food and energy, to rise 0.1% month-over-month, resulting in a 2.5% annual gain.

This would mark a slight cooling from March’s 2.6% reading, but the figure could still fuel volatility as investors evaluate whether inflation is sticky enough to delay any potential rate cuts.

Corporate Earnings in Spotlight

Friday also brings more corporate earnings results, with investors parsing updates from Gap Inc. (NYSE:GAP), Ulta Beauty (NASDAQ:ULTA), and Dell Technologies (NYSE:DELL). All three released quarterly figures after the market close on Thursday, offering fresh insight into consumer spending trends and tech sector momentum.

With month-end approaching and macro uncertainty building, investors appear to be adopting a defensive posture, awaiting clarity on inflation, interest rates, and the outcome of escalating trade tensions.