US Stock Futures Tumble as S&P 500 Dips Below 5,000 Amid Escalating Trade War
U.S. stock index futures fell sharply on Tuesday night following a steep sell-off on Wall Street, with the S&P 500 closing below the key 5,000 level for the first time in nearly a year. The decline came as markets reacted to President Donald Trump’s newly announced tariff hike targeting Chinese imports.
In a significant escalation of the U.S.-China trade conflict, President Trump signed an executive order to raise tariffs on Chinese goods. The move boosts the reciprocal tariff rate from 34% to 84%, bringing the total tariff burden on Chinese imports to a staggering 104% when combined with earlier levies.
Markets React Swiftly to Tariff Announcement
As of 8:25 PM ET (00:25 GMT), S&P 500 Futures dropped 1.8% to 4,929.75, while Nasdaq 100 Futures declined 2.2% to 16,868.50. Dow Jones Futures were also down 1.4% to 37,325.0.
In regular trading hours, the S&P 500 closed at 4,982.77, a 1.6% drop and its first close below 5,000 since May 2024. The Dow Jones Industrial Average fell 0.8%, and the Nasdaq Composite sank 2.2%, with losses concentrated in technology and growth stocks.
Tariffs Fuel Market Uncertainty
The White House confirmed that the new cumulative 104% tariff package will go into effect at midnight. This includes a fresh 50% levy on Chinese products, on top of the previously announced 34% tariff.
Tensions were further heightened after China warned it would "fight to the end" if the U.S. proceeded with its tariff plan. This added to investor concerns over prolonged economic uncertainty and strained diplomatic ties.
While Treasury Secretary Scott Bessent initially hinted at possible room for negotiation, any hopes of relief faded after U.S. Trade Representative Jamieson Greer stated there would be no exemptions for any companies or products.
Tech Sector Takes a Hit
The technology sector led the day’s losses. Apple (NASDAQ:AAPL) fell 4.8%, hitting an 11-month low, and Tesla (NASDAQ:TSLA) dropped 5%. Nvidia (NASDAQ:NVDA) also declined by 1.4%, while Amazon and Meta Platforms saw negative movement as well.
Broadcom (NASDAQ:AVGO) was a rare bright spot, gaining 1.4% after announcing a $10 billion stock buyback program, helping to offset trade-related pressures.
What’s Next?
Markets are now looking ahead to Thursday’s U.S. Consumer Price Index (CPI) report, which is expected to provide further insight into inflation trends and influence the Federal Reserve’s next moves.
Japan Rules Out Using U.S. Treasury Holdings to Retaliate Against Trump’s Tariffs
TOKYO (Reuters) – Japan's Finance Minister Katsunobu Kato stated on Wednesday that the government will not use its U.S. Treasury holdings as a means of countering the recent tariff measures imposed by President Donald Trump on Japanese imports.
Speaking before parliament, Kato emphasized that Japan manages its U.S. Treasury assets with the intent of maintaining financial stability and for potential use in future currency market interventions—not as a tool of diplomatic retaliation.
U.S. Treasury Sales Not a Diplomatic Lever
“Our U.S. Treasury holdings are maintained from the standpoint of preparing for future exchange-rate intervention,” Kato clarified. “They are not managed with the goal of bilateral diplomacy.”
The statement came in response to a suggestion from a ruling party lawmaker, who proposed that Japan consider selling a portion of its U.S. Treasuries—a significant part of the country’s $1.27 trillion in foreign reserves—as a countermeasure to Trump’s new tariffs.
However, Kato pushed back against the idea, explaining that liquidating foreign reserves would effectively amount to buying yen, which would be seen as direct currency intervention.
No Plans to Adjust Reserve Size
Kato also noted that the Japanese government does not view its foreign reserves as overly large and has no predetermined standard for what an “appropriate” reserve size should be.
“Even if the operations are small, we must be cautious in taking such steps,” he added, stressing the sensitivity of making any adjustments that could be interpreted as manipulating currency markets.
Japan's foreign exchange reserves—among the largest in the world—are believed to be heavily invested in U.S. government debt, though exact compositions are not publicly disclosed.
Background: Rising Tensions with the U.S.
The comments come as the Trump administration escalates trade tensions with key global partners, including Japan and China. The imposition of new tariffs on Japanese imports is part of a broader push for what the administration calls “fair and reciprocal trade.”
Japan’s response so far appears measured, choosing to avoid direct economic retaliation and signaling a preference for stability and long-term planning over short-term political maneuvering.
Gold ETF Inflows Surge to 3-Year High in Q1 Amid Trump Tariff Shock
Global demand for gold spiked in the first quarter of 2025, as physically-backed gold ETFs recorded their largest inflows in three years, according to new data released by the World Gold Council on Tuesday. The surge comes amid intensifying fears of a global trade war sparked by aggressive new U.S. tariffs under President Donald Trump.
ETF Inflows Surge on Escalating Risk
In the three months ending March 31, gold ETFs saw net inflows of approximately 226.5 tonnes, marking the highest quarterly addition since Q1 2022—when Russia’s invasion of Ukraine triggered a similar rush to safe-haven assets with 271.7 tonnes in inflows.
In U.S. dollar terms, the first quarter of 2025 recorded an eye-popping $21.1 billion in inflows into gold ETFs, the most since Q2 2020, when the COVID-19 pandemic disrupted global markets.
This demand surge helped push gold prices to record highs, topping $3,150 per ounce in recent weeks.
North America Leads the Gold Rush
North American investors accounted for the bulk of these ETF inflows, with strong interest also coming from Europe and Asia. The flight to gold is largely attributed to rising geopolitical and economic uncertainty, especially stemming from U.S. trade policy.
Trump’s Tariffs Shake Global Markets
Gold’s appeal as a safe-haven asset intensified following Trump’s announcement of sweeping reciprocal tariffs on key trading partners—including China, the EU, and Japan. These measures, set to go into effect on April 9, have triggered fears of a new trade war.
China has already vowed to retaliate, and Trump responded by threatening to raise tariffs on Chinese goods to an unprecedented 104%, stoking volatility in global financial markets.
Analysts warn that the tariffs could severely disrupt global supply chains, increase import prices, and contribute to higher inflation in the U.S. These risks have led to growing investor concerns about a potential U.S. recession, further driving safe-haven flows into gold.
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