U.S. equity futures slipped lower in early Friday trading, while Treasury yields and the dollar held steady, as markets continue to express caution over the prospects of a global trade war while eyeing a key inflation reading prior to the opening bell.
Stocks ended lower across the board last night, with the S&P 500 falling 0.33% on the session following President Trump’s latest tariff salvo, which includes a 25% levy on auto sector imports in addition to other duties that are set to either resume or be introduced early next week.
Collectively, Trump’s trade agenda has established highest overall U.S. tariff rate since the second world war, prompting reactions from leaders in Europe, Asia and north America that are likely to accelerate that current tensions with Washington over the coming months.
At the same time, both sentiment and practical data suggest the economy has slowed notably over the first three months of the year, with the Atlanta Fed’s GDPNow tracker indicating a contraction of around 1.8%, following the Commerce Department’s final reading of 2.4% for the three months ending in December.
Fed Chair Jerome Powell and his colleagues will pay close attention to any tariff-related inflation pressures in today’s PCE inflation report.
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Investors will get another look at the tariff impact on the economy later this morning, with the Bureau of Economic Statistics’ PCE inflation report, expected at 8:30 am Eastern time.
The Federal Reserve’s preferred gauge is likely to show a moderate acceleration in core price pressures, according to Street forecasts, with little-change in headline readings for the month of February.
Benchmark 2-year Treasury note yields were marked a couple of basis points lower in overnight trading at 3.994% heading into the Friday session, with 10-year notes pegged at 4.341%.
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The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.08% higher at 104.421.
Gold prices, meanwhile, extended their recent run of record highs, rising 0.97% to a fresh all-time peak of $3,086.21 as investors continue to seek safe-haven assets amid the trade and growth uncertainty.
The bullion has gained around 17% so far this year and is on pace for its strongest quarterly gain since 1986.
Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500, which is down 3.2% for the quarter, are priced for an opening bell decline of around 18 while the Dow Jones Industrial Average is called 105 points lower.
The Nasdaq, meanwhile, is called 82 points lower with Tesla (TSLA) , Nvidia (NVDA) and Palantir Technologies (PLTR) active in premarket trading.
Investors will also be tracking the debut of cloud services group CoreWeave, the biggest IPO of the year, later today on the Nasdaq. The Nvidia-backed group lowered its 37.5 million share sale price to $40 per share.
Lululemon Athletic (LULU) shares were another notable mover, tumbling 12.4% to #299.20 each after the sports and leisure apparel group cited both tariffs and a consumer spending pullback as affecting its weaker-than-expected sales and profit outlook.
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In overseas markets, Europe’s Stoxx 600 was marked 0.24% lower in mid-day Frankfurt trading, with the FTSE 100 down 0.21% in London.
Overnight in Asia, trade war concerns dragged Japan’s auto-heavy Nikkei 225 index 1.8%, while the regional MSCI ex-Japan benchmark fell 0.58% into the close of trading.
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