S&P 500 Futures Dip After Historic Rally Triggered by Trump’s Surprise Tariff Reversal

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U.S. stock futures edged lower Thursday morning after the S&P 500 posted one of its most dramatic rallies in decades, fueled by former President Donald Trump’s unexpected reversal on planned global tariffs.

The S&P 500 futures dipped around 0.3% in early trading, indicating a potential pullback from Wednesday’s explosive gains.

The S&P 500 index itself surged over 9% in a single session—its third-largest one-day percentage gain since World War II—driven by investor optimism following Trump’s announcement that he would pause the rollout of sweeping new tariffs for 90 days, excluding China.

While the historic stock market rally was a welcome surprise for many investors, Thursday’s modest decline in futures suggests a cooling of enthusiasm as markets digest the finer details of the policy shift.

Tariff Relief Sparks Rally—But China Left Out

The rally was sparked by Trump’s announcement that he would delay the imposition of proposed tariffs on imports from most U.S. trading partners. However, China was notably excluded from this tariff relief.

Instead, Trump stated that tariffs on Chinese goods would increase to 125%, escalating tensions with America’s largest trading partner.

China responded swiftly, slapping retaliatory tariffs of 84% on a broad array of U.S. exports, reigniting fears of a protracted U.S.-China trade war and renewed pressure on global supply chains.

Market Sentiment Mixed

Investors had initially interpreted the temporary tariff pause as a sign of possible de-escalation in trade tensions, particularly with the European Union and key U.S. allies. This fueled a wave of buying across all sectors—from tech stocks to industrials and consumer goods.

But market strategists warned that Wall Street volatility is likely to remain elevated as long as uncertainties around U.S.-China trade relations persist.

“The sharp rebound we saw yesterday was emotional and driven by headlines,” said Marcy Thompson, chief equity strategist at Meridian Global. “Today’s pullback in S&P 500 futures is a more rational reflection of lingering risks.”

Inflation and Rate Expectations in Focus

Beyond trade, investors are also eyeing upcoming inflation data and comments from the Federal Reserve for clues on future monetary policy. The combination of elevated inflation, volatile commodity prices, and rising geopolitical tensions continues to cloud the economic outlook.

Outlook for Investors

With Trump’s trade policy once again taking center stage, markets will be watching closely for further developments.

For now, Thursday’s futures dip is a sign that despite momentary euphoria, uncertainty continues to shape investor sentiment.

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