June S&P 500 E-Mini futures (ESM25) are down -3.09%, and June Nasdaq 100 E-Mini futures (NQM25) are down -3.42% this morning, pointing to a sharply lower open on Wall Street as sweeping tariffs announced by U.S. President Donald Trump fueled fears of an escalating trade war and economic slowdown.

President Trump on Wednesday unveiled the most aggressive U.S. tariffs in a century as he intensifies his push to reshape world trade. Trump said that a baseline 10% tariff would be imposed on almost all U.S. imports starting April 5th. Also, numerous countries would be hit with additional “reciprocal” tariffs, including total duties of 54% on China, 46% on Vietnam, and 20% on the European Union. The higher tariffs on targeted countries, which will replace - not supplement - the 10% baseline rate, are scheduled to take effect on April 9th, according to the White House. The announcement stoked a global risk-off mood, with gold reaching new highs and the 10-year Treasury yield falling to its lowest level in over five months as investors flocked to haven assets.

“The tariff plans provided significantly more clarity than many investors likely had expected,” wrote Michael Zezas, global head of fixed-income research and public policy strategy at Morgan Stanley. “However, the magnitude of the tariffs announced by the White House suggest that the downside risks to global growth have increased relatively to what was already priced by markets.”

Investors now await a new round of U.S. economic data and remarks from Federal Reserve officials.

In yesterday’s trading session, Wall Street’s three main equity benchmarks ended in the green. Tesla (TSLA) climbed over +5% and was the top percentage gainer on the Nasdaq 100 after Politico reported that President Trump had told his inner circle that Elon Musk would soon step back from his government role and return to his businesses. Also, Caesars Entertainment (CZR) advanced more than +5% after Raymond James added the stock to its “Analyst Current Favorites” list. In addition, DoorDash (DASH) rose over +3% after announcing a partnership with Domino’s Pizza, where orders placed on DoorDash’s Marketplace will be delivered by Domino’s drivers. On the bearish side, nCino (NCNO) tumbled more than -19% after the cloud-based software company posted weaker-than-expected Q4 adjusted EPS and issued below-consensus FY26 guidance. 

The ADP National Employment report released on Wednesday showed that U.S. private nonfarm payrolls rose by 155K in March, easily topping the 118K consensus. Also, U.S. factory orders rose +0.6% m/m in February, stronger than expectations of +0.5% m/m.

Fed Governor Adriana Kugler said on Wednesday, “I will support maintaining the current policy rate for as long as these upside risks to inflation continue [pointing to government policy changes], while economic activity and employment remain stable. Going forward, I will carefully assess incoming data, the evolving outlook, and changes in the balance of risks.”

Meanwhile, U.S. rate futures have priced in a 78.1% chance of no rate change and a 21.9% chance of a 25 basis point rate cut at May’s monetary policy meeting.

Today, investors will focus on the U.S. ISM Non-Manufacturing PMI and S&P Global Services PMI, set to be released in a couple of hours. Economists forecast the March ISM services index to be 53.0 and the S&P Global services PMI to be 54.1, compared to the previous values of 53.5 and 51.0, respectively.

U.S. Initial Jobless Claims data will also be closely monitored today. Economists expect this figure to be 225K, compared to last week’s number of 224K.

U.S. Trade Balance data will be released today as well. Economists foresee this figure standing at -$122.50B in February, compared to -$131.40B in January.

In addition, market participants will hear perspectives from Fed Vice Chair Philip Jefferson and Fed Governor Lisa Cook throughout the day.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.054%, down -3.36%.

The Euro Stoxx 50 Index is down -1.74% this morning following U.S. President Donald Trump’s announcement of the most aggressive American tariffs in a century against its trading partners. Mining, consumer product, and industrial stocks led the declines on Thursday. Bank stocks, vulnerable to the economic outlook, also slumped as investors increased bets on European Central Bank rate cuts, even as the trade war raised fears of mounting inflation. The U.S. president unveiled a range of “reciprocal tariffs” on over 180 countries and territories on Wednesday, including a 20% tariff on imports from the EU and a 10% tariff on imports from the U.K. The move risks erasing much of the Eurozone growth that the ECB has projected for this and the following year. In response, European Commission President Ursula von der Leyen said in a video address Thursday, “President Trump’s announcement is a major blow to the world economy. We’re preparing for further countermeasures to protect our interests and businesses if negotiations fail.” Meanwhile, a survey released on Thursday showed that the Eurozone economy managed modest growth for the third consecutive month in March, as the bloc’s manufacturing sector hinted at a rebound and its dominant services sector grew at a marginally quicker rate than in the previous month. In corporate news, sporting goods manufacturers Adidas Ag (ADS.D.DX) and Puma Se (PUM.D.DX) plunged over -9% as their primary sourcing markets were targeted with hefty tariffs.

Eurozone’s Composite PMI, Eurozone’s Services PMI, and Eurozone’s PPI data were released today.

Eurozone March Composite PMI stood at 50.9, stronger than expectations of 50.4.

Eurozone March Services PMI arrived at 51.0, stronger than expectations of 50.4.

Eurozone February PPI has been reported at +0.2% m/m, weaker than expectations of +0.3% m/m.

Asian stock markets today settled in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.24%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -2.77%.

China’s Shanghai Composite Index closed slightly lower today following U.S. President Donald Trump’s announcement of so-called reciprocal tariffs. Home appliances, consumer products, and hardware stocks led the declines on Thursday. Trump stated that the U.S. will slap an additional 34% tariff on Chinese goods, which will add to the 20% already in effect earlier this year, bringing the total tariff burden on Chinese imports to 54%. The U.S. also announced the elimination of “de minimis” tariff exemptions for packages from China and Hong Kong. The exemptions, currently permitting packages valued at up to $800 to enter the U.S. duty-free, will terminate on May 2nd. In response, China’s Commerce Ministry stated on Thursday that the country will implement “resolute” countermeasures against the Trump administration’s tariffs on Chinese goods to safeguard its interests. “China urges the U.S. to immediately revoke its unilateral tariff measures and work with trading partners to resolve differences through fair and constructive dialogue,” said the ministry. Meanwhile, the benchmark index trimmed the bulk of its losses by the close as investors wagered that authorities would intensify fiscal stimulus and monetary easing to safeguard the economy. Another positive factor that supported the index was a private sector survey indicating that China’s services activity climbed to a three-month high in March, with both business activity and new orders improving from February. In corporate news, Techtronic Industries, the machine tool manufacturer that derived 76% of its sales from North America last year, tumbled over -12% in Hong Kong following the U.S. tariff announcement.

The Chinese March Caixin Services PMI came in at 51.9, stronger than expectations of 51.5.

Japan’s Nikkei 225 Stock Index closed sharply lower and hit an 8-month low today after U.S. President Donald Trump announced sweeping tariffs that were more aggressive than market participants had expected. President Trump on Wednesday slapped a steeper-than-expected 24% tariff on Japanese goods, while a previously announced 25% tariff on auto imports went into effect today, dealing a significant blow to Japan’s auto sector. “We thought tariffs would be 10%, maybe 20%, but instead they were a whopping 24%. The market is firmly in risk-off mode,” said Kazuo Kamitani, an equities strategist at Nomura Securities. Yoji Muto, Japan’s minister of economy, trade, and industry, said at a Thursday morning press briefing that the Japanese government will keep urging the U.S. to exempt the country from new U.S. tariffs. He called the decision “extremely regrettable.” Bank stocks led the declines on Thursday as a sharp drop in bond yields at home and abroad clouded the prospects for income from lending and investing. Export-oriented stocks also slumped amid a rally in the safe-haven Japanese yen. Earlier this week, Goldman Sachs picked the yen as the best hedge against a potential U.S. recession and tariff-related risks. Meanwhile, a business survey released on Thursday revealed that Japan’s service sector stagnated in March, while overall private sector activity saw its fastest contraction in over two years. In other news, data from Japan’s Ministry of Finance showed that foreign investors offloaded Japanese stocks worth 450.4 billion yen ($3.06 billion) on a net basis in the week ending March 29th, marking the ninth consecutive week of outflows, driven by worries that U.S. reciprocal tariffs could disrupt exports. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +13.50% to 31.03.

The Japanese March au Jibun Bank Services PMI arrived at 50.0, stronger than expectations of 49.5.

Pre-Market U.S. Stock Movers

Nike (NKE), Gap Inc. (GAP), and Lululemon Athletica (LULU) slumped over -8% in pre-market trading as they depend on goods and manufacturing facilities in Vietnam, which is now facing a 46% tariff.

Apple (AAPL) slid more than -6% in pre-market trading, pressured by a combined 54% tariff on China due to its heavy reliance on the country for its supply chain.

RH (RH) plummeted over -27% in pre-market trading after the luxury home furnishing company posted downbeat Q4 results and provided disappointing FY25 revenue guidance.

Lyft (LYFT) plunged more than -10% in pre-market trading after BofA double-downgraded the stock to Underperform from Buy with a price target of $10.50. 

Dollar Tree (DLTR) tumbled over -10% in pre-market trading after saying that tariffs on China could affect sales. 

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Thursday - April 3rd

Conagra Brands (CAG), Acuity Brands (AYI), Lamb Weston Holdings (LW), MSC Industrial Direct (MSM), Lindsay (LNN), Guess (GES), Simulations Plus (SLP), Lifecore Biomedical (LFCR).