Momentum from a two-day relief rally in the stock market slowed considerably on Thursday, with mixed signals about tariff negotiations tempering investor’s optimism.
Before trading kicked off, both the Dow Jones Industrial Average futures and S&P 500 futures were down, 194 points, or 0.5%, and 10 points and 0.2%, respectively, signaling a weaker start to the day on Wall Street. The tech-heavy Nasdaq Composite futures, on the other hand, were up 2.5%.
“Stocks are sliding so far this morning after China threw cold water on hopes of a trade détente w/the U.S. while investors shrugged at reports of some auto tariff exemptions in the U.S.,” Adam Crisafulli, head of Vital Knowledge, said in a report.
This marks a departure from the past two days, when markets rallied following news of a potential U.S. trade deal with China. “There is an opportunity for a big deal here,” U.S. Treasury Secretary Scott Bessent said Wednesday during a keynote address at the Institute of International Finance in Washington, D.C.
The Wall Street Journal yesterday reported the White House was considering easing its tariffs on China, which currently stand at 145%.
President Trump has suggested trade talks with China were in the works, saying “everything’s active” when asked if he was engaging with China. China, however, has denied this assertion.
“Any claims about the progress of China-U.S. trade negotiations are groundless as trying to catch the wind and have no factual basis,” said Ministry of Commerce spokesman He Yadong.
The markets shed early gains yesterday but still closed higher. But by Wednesday, futures and a market performance abroad told a different story. Asian markets were down Wednesday and European markets experienced a softer open, according to Capital Economics.
“Optimism that countries will be able to strike deals to reduce tariffs have helped fuel a rebound in equity markets over the past few days,” said Neil Shearing, group chief economist at Capital Economics. “But the latest positive news on tariffs has failed to drive further gains in equities.”
The whipsawing in the markets comes after Mr. Trump flip-flopped on whether he would oust Federal Reserve Chairman Jerome Powell. Mr. Trump late Tuesday said that he has “no intention” to fire the head of the Federal Reserve, easing some investor concerns.
contributed to this report.
