U.S. Stock Futures Slip as Markets Assess Fed Policy and Trade Risks

U.S. stock futures edged lower on Thursday, retracing some of the sharp gains seen in the previous session after the Federal Reserve reaffirmed its outlook for rate cuts this year while signaling concerns over inflation and economic uncertainty tied to President Trump’s tariff policies.

Market Overview:

At 06:10 ET (10:10 GMT):

• Dow Jones Futures fell 75 points (-0.2%)
• S&P 500 Futures dropped 17 points (-0.3%)
• Nasdaq 100 Futures slipped 90 points (-0.5%)

While stocks rallied strongly on Wednesday, all three major indices remain near six-month lows as persistent concerns over Trump’s tariffs and slowing economic growth weigh on investor sentiment.

Key Drivers:

Fed Maintains Rate Cut Outlook Amid Economic Concerns

• The Fed kept interest rates unchanged at 4.25%-4.5%, as widely expected.
• The central bank reaffirmed its outlook for two rate cuts by December, lowering rates to 3.75%-4% in 2025.
• However, the Fed raised its core PCE inflation forecast to 2.8% for 2025 (up from 2.5%)—still above its 2% target.
• Economic Growth Outlook Trimmed: The Fed also lowered its U.S. GDP forecast and flagged uncertainty over the economic impact of Trump’s tariffs.
• Fed Chair Powell cautioned that it was too early to gauge the full impact of the tariffs, but the central bank’s outlook suggests non-negligible effects on inflation and growth.

Trump Tariff Tensions Continue

• Trump reaffirmed his plans for reciprocal tariffs by April 2, potentially triggering retaliation from major global economies and reigniting trade war fears.

Upcoming Market Catalysts:

Economic Data to Watch

• Jobless claims data will provide fresh insights into the labor market, a key factor influencing the Fed’s monetary policy.
• The Philadelphia Fed Manufacturing Index is also due, offering another gauge of economic activity.

Earnings Reports on the Radar

Investors will closely analyze earnings from:

• FedEx (FDX): Investors will watch for insights into U.S. consumer demand and potential revenue challenges.
• Micron Technology (MU): Focus will be on AI-driven data center chip demand, though concerns linger over its consumer chip business.
• Nike (NKE): The retailer faces weak consumer sentiment, with expectations for its sharpest revenue decline in nearly five years.

With Fed policy, tariff risks, and corporate earnings shaping sentiment, markets remain volatile as investors assess the trajectory of U.S. economic growth and inflation.