US pre-open: Futures sharply lower following tariff announcement
By Iain Gilbert
Date: Thursday 03 Apr 2025
(Sharecast News) - Futures were firmly in the red ahead of the bell on Thursday as investors grew fearful that Donald Trump's sweeping tariffs were risking a global trade war that could hurt an already struggling US economy.
As of 1220 BST, Dow Jones futures were down 2.79%, while S&P 500 and Nasdaq-100 futures had the indices opening 3.44% and 3.96% weaker, respectively.
The Dow closed 235.36 points higher on Thursday ahead of the president's 'Liberation Day' tariff announcements.
Trump said the tariffs were a "historic executive order instituting reciprocal tariffs on countries throughout the world", with the White House revealing that it would slap a baseline tariff rate of 10% on all nations, with effect from 5 April 5, with even bigger duties against countries that levy higher rates on the US set to be put in place in coming days, according to the Trump administration.
"Reciprocal. That means they do it to us and we do it to them. Very simple. Can't get any simpler than that," said Trump, who branded his tariffs as America's "declaration of economic independence".
He also claimed that both jobs and factories would "come roaring back" and that the tariffs would usher in a "golden age" for the country. "We will supercharge our domestic industrial base, we will pry open foreign markets and break down foreign trade barriers and ultimately more production at home will mean stronger competition and lower prices for consumers," he said.
However, Trump also stated the tariffs "will be not a full reciprocal. I could have done that, I guess. But it would have been tough for a lot of countries". He said his administration will charge nations "approximately half of what they are and have been charging" the US. He also said the halved figure would include "the combined rate of all their tariffs, nonmonetary barriers and other forms of cheating".
Trade Nation's David Morrison said: "It appears that investors weren't sufficiently prepared for the size and scope of the tariffs. It looks as if most were banking on a more 'market friendly' approach from the Trump administration, such as a 10% tariff across the board on US imports as the starting point for further negotiations. It was therefore something of a disappointment when, in addition to this baseline, many countries will be hit with additional charges.
"Trump must have confidence that the US still has a few bright sparks left in government both able, and willing, to set things in motion. The Trump administration expects to raise significant revenue from tariffs. Estimates start at $600.0bn, along with encouraging the onshoring of manufacturing back to the US, a process which will take years and come at significant cost. There are so many questions over this, including how the US's trading partners will react. It sounds as if the UK will not retaliate, but the EU has threatened to respond in kind. As far as French President Macron is concerned, the world is already in a trade war. Also, will tariffs prove to be inflationary as many are convinced, and will they depress economic activity to such an extent that a recession is triggered?"
On the macro front, Challenger job cuts data for March will be out at 1230 BST, while weekly jobless claims figures and February goods and services trade balance figures will be on deck at 1330 BST, S&P Global's March services PMI was slated for release at 1445 BST and the ISM's services PMI will follow at 1500 BST.
Reporting by Iain Gilbert at Sharecast.com
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