Stock Futures: Following weak earnings estimate from retail behemoth Walmart, the major averages fell, while U.S. stock futures saw minimal movement Thursday night. US markets began the day lower, with the Dow Jones starting 0.93% lower at 44,213.3 and the S&P 500 opening 0.7% lower at 6101.
US President Donald Trump’s planned tariffs on imports of cars, semiconductors, and pharmaceuticals, as well as the possibility that the Fed would keep interest rates higher for a long time, are being actively watched by traders around the world. Let’s learn more about the US market and its impact on stock futures.
Brief Background of S&P 500
The Standard & Poor’s 500 Index, sometimes known as the S&P 500 Index, is a market capitalization-weighted measure of the top 500 publicly traded firms in the United States. Three of the components in the index have two classes of shares specified, so there are 503 total.
Due to additional criteria included in the index, it is not a precise top 500 American firms list by market capitalization. Nevertheless, the S&P 500 index is thought to be among the most accurate indicators of the performance of major American stocks and the stock futures as a whole.
Why S&P 500 is Down Today?
Following the Conference Board’s announcement that its Economic Index (leading) had unexpectedly dropped in January, concerns over the status of the economy affected the market. Treasury yields declined as bank equities, including those of Morgan Stanley and Goldman Sachs, declined.
Additionally, due to the decline on Thursday, the S&P 500 ended the week in negative territory. The session’s broad index fell 0.7%. Consequently, the S&P 500 has lost roughly 0.1% of its value for the week, which began on Tuesday after Monday’s market was closed in observance of Presidents Day.
Trump’s Tariff Threats Damage Public Opinion
With his most recent wave of threats targeting semiconductors, timber, pharmaceuticals, and cars, Trump vowed to slap further trade duties this week. The president suggested imposing a 25% tax on every industry. Trump also reiterated his threats to impose retaliatory tariffs on significant trading partners of the United States, stating that such penalties might be implemented as early as April. His comments heightened fears of a new international trade war, and investors were unsure if the tariffs were a real threat or merely a negotiation ploy.
Walmart Pressure
After dropping 6.5% during Thursday’s session, Wall Street Walmart Inc. steadied in after-hours trading after reporting lower-than-expected results for the December quarter. Due to worries that U.S. consumer spending, a key economic driver, was slowing down following a robust run in the previous year, Walmart’s losses spread to other retail firms.
Conclusion
The S&P 500’s notable and prolonged drop is frequently an indication that the US economy is having difficulties. Moreover, due to their complexity, stock futures are not appropriate for every investor. Before trading stock futures, it is essential to comprehend the dangers and have a firm grasp of the market.
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