US Stock Futures Slip As Trade Deals, Earnings Worries Temper Rally Mood — Strategist Doubts 'V-shaped' Recovery

Major U.S. index futures edged lower in Asian trading hours on Thursday, suggesting a moderation in the buying momentum of the past two days. 

The lackluster sentiment comes amid the ongoing tariff uncertainty, earnings anxiety, and President Donald Trump's renewed attack on Federal Reserve Chair Fed Jerome Powell.

In the Asian session, the trend in the futures market was as follows:

• S&P 500 futures: -0.03%
• Nasdaq 100 futures: -0.11%
• Dow futures: -0.29%
• Russell 2000 futures: -0.06%

While the 10-year Treasury note edged 2.9 points lower to 4.358% in overnight trading, gold futures rebounded, and the West Texas Intermediate (WTI)-grade crude oil was trading flat.

Trump's reciprocal tariffs, though paused for most nations, remain a headwind, and investors might want to see bilateral trade deals completed so that the issue can be put in the rearview mirror.

In a note released on Tuesday, Wedbush analyst Daniel Ives said, "This game of high-stakes poker from the White House needs to result in trade deals ASAP...otherwise, more shoes will drop from this economic uncertainty as companies, C-level management, and trading partners need to know the rules of the games."

Meanwhile, Trump said he had not yet called Powell but suggested he might do so soon, according to a CNN report.

"I believe he's making a mistake by not lowering interest rates, and I think, as well as we're doing, we could do much better," he added.

A negative reaction to Dow component International Business Machines's (IBM) earnings could hurt the blue-chip average, although the rest of the key tech earnings from Texas Instruments (TXN) and chip-equipment maker Lam Research (LRCX) generated positive reactions.

The key Main Street catalysts for Thursday's session include the weekly jobless claims report, the March durable goods orders report, and the existing home sales report.

After the market closes, Minneapolis Fed President Neel Kashkari is set to make a public appearance.

The Fed's Beige Book, released Wednesday, showed that current economic activity remained slightly unchanged in the 12 districts but suggested worsening ahead. "The outlook in several Districts worsened considerably as economic uncertainty, particularly surrounding tariffs, rose," it said.

On the earnings front, traders are likely to focus on the quarterly reports from Bristol-Myers Squibb (BMY), PepsiCo. (PEP), Procter & Gamble (PG), STMicroelectronics (STM), Alphabet, Inc. (GOOGL) (GOOG), Intel (INTC) and T-Mobile US, Inc. (TMUS).

U.S. stocks extended their gains for a second straight session on Wednesday, thanks to Trump toning down his rhetoric on Powell and positive reactions to earnings reports from bellwethers such as Tesla (TSLA) and Boeing (BA).

Larry Tentarelli, Chief Technical Strategist for Blue Chip Daily Trend Report, noted that all the Nasdaq 100 stocks closed in the green for the first time since Oct. 2022, when the current bull market began. He also noted that 98% of the S&P 500 stocks also advanced.

LPL Chief Technical Strategist Adam Turnquist said, "The narrative transition from tariff rates to tariff deals is an important step in the recovery of the equity market."

The strategist said a sustainable recovery would require some much-needed technical repair, given that most S&P 500 stocks remain in a downtrend, and a shift back toward risk-on leadership.

"V-shaped recoveries are rare and are typically accompanied by a pivot from the Fed, an unlikely scenario given Chair Powell's continued "patient" approach with monetary policy," he added.

The SPDR S&P 500 ETF (SPY) exchange-traded fund (ETF) ended Wednesday's session up 1.55% at $535.42, while the Invesco QQQ Trust (QQQ) ETF jumped 2.27% at $454.56.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) gained 1.03% to $395.91.

The iShares Russell 2,000 ETF (IWM) ended up 1.48% at $190.25.

Yet the SPY, QQQ, and DIA are now down over 8.4%, 11%, and 7%, respectively, for the year-to-date period. The IWM has fallen a steeper 13.7%.

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