S&P 500’s Recovery At Risk? US Stock Futures Fall Amid Tariff Anxiety, But Strategist Says ‘Summer Surprise Rally Will Continue’

U.S. stock futures were modestly lower in overnight trading after the major averages closed uniformly higher on Wednesday. President Donald Trump’s barrage of tariff-related announcements has served to keep traders on the tenterhooks, even as traders look ahead to Federal Reserve officials’ speeches scheduled for Thursday.

As of 11:55 p.m. ET on Wednesday, the S&P 500, Nasdaq 100, and Dow futures all traded down about 0.25% or more, while the Russell 2000 futures slipped close to 0.35%.

IT, communication services, and real estate stocks led Wednesday’s rally as traders took Trump’s letters to a second batch of countries regarding increased tariff rates, which would take effect from Aug. 1, in stride. 

Traders also took stock of the division among the Fed policymakers relayed by the minutes of the June rate-setting meeting. 

Fund manager Louis Navellier said the market was becoming accustomed to the onslaught of tariff announcements.

“The tariff uncertainty remains, but what we do know is that we're collecting billions of dollars in tariff fees, and the incentive to move production to the US to avoid tariffs is real and gaining traction,” he added.

Riding on the back of artificial intelligence (AI) momentum, Nvidia (NVDA) became the first company to hit the $4 trillion market-cap mark. 

The S&P 500 Index snapped a two-session losing streak and settled at 6,263.26, off its July 3 record high of 6,279.35.

The SPDR S&P 500 ETF (SPY) and the Invesco QQQ Trust (QQQ), exchange-traded funds (ETFs) that track the S&P 500 and Nasdaq 100 indices, rose 0.60% and 0.71%, respectively.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) added 0.48% and the iShares Russell 2000 ETF (IWM) rallied a steeper 1.08%.

Among the Main Street catalysts, the initial jobless claims data is due at 8:30 a.m. ET, and speeches by St. Louis Fed President Alberto Musalem (10 a.m. ET) and San Francisco Fed President Mary Daly (2:30 p.m. ET) are likely to be on traders’ radar.

ConAgra (CAG), Delta Air Lines (DAL), Helen of Troy (HELE), Levi Strauss (LEVI), and WD-40 (WDFC) are among the notable names reporting earnings. 

Delving into the outlook for the second half of the year, Carson Group Chief Market Strategist Ryan Detrick said, “The market is telling us it wants to go higher.” Speaking to Yahoo Finance, the strategist admitted that “there's some froth.”

Detrick pointed out that many hedge funds and institutions have missed the upside seen so far. “I'm not seeing froth that worries me significantly here… I still think it's a bull market, and I think this summer surprise rally will continue,” he said.

Crude oil prices were trading nearly flat with a negative bias in overnight trading, with the West Texas Intermediate grade crude above $63 a barrel, while gold held firmly above the $3,325 mark. 

The 10-year U.S. Treasury note yield slipped further after settling Wednesday’s session down 7.3 basis points at 4.3420%.

The U.S. dollar slipped against most major currencies.

In Asia, stocks were mostly higher across the regional markets, as traders cheered Wall Street’s tech-led rally overnight. The yen’s strength, meanwhile, weighed down on the export-dependent Japanese market.

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