Why S&P 500, and Nasdaq 100 Futures Plummet to 6-Month Lows Amid Trump’s Tariff Turmoil

On Thursday,
April 3, 2025, global financial markets are experiencing significant turbulence
following U.S. President Donald Trump’s announcement of sweeping new tariffs,
sparking widespread declines in stock indices across Europe and the United
States.

Investors reacted
swiftly, driving major indices and futures contracts to multi-month lows, including
Euro Stoxx 50, S&P 500, and Nasdaq 100. In this article, we examine how
European stock markets opened on Thursday, the current prices of futures on
Wall Street, and the reasons behind gold reaching new record highs.

The
announcement, dubbed “Liberation Day” by Trump, introduced tariffs ranging from
10% on imports from numerous countries to as high as 50% on goods from specific
nations like Lesotho, with an effective rate on Chinese imports exceeding 50%
when combined with existing duties. This aggressive trade policy shift sent
shockwaves through global markets, amplifying fears of a potential trade war
and disrupting supply chains.

LIBERATION DAY RECIPROCAL TARIFFS 🇺🇸 pic.twitter.com/ODckbUWKvO

— The White House (@WhiteHouse) April 2, 2025

In Europe,
the Euro Stoxx 50 index opened the day at its lowest levels since February,
though it later rebounded slightly by 0.39% to 5,210. However, the broader Euro
Stoxx 600 index slid 1.2% to 530, testing its weakest point since January.

Germany’s
DAX index also took a hit, dropping 1.3% to 22,104 after earlier touching
two-month lows. These declines reflect growing concerns among European
investors about the impact of U.S. tariffs on export-heavy economies,
particularly in sectors like automotive and manufacturing.

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Across the
Atlantic, U.S. markets mirrored this pessimism. Futures contracts on the
S&P 500 fell approximately 3% to 5,549 ahead of Thursday’s cash market
opening, though intraday lows hit 5,481—the lowest since September 2024,
marking a six-month trough.

Similarly,
Nasdaq 100 futures shed 3.2% to 19,134, with earlier intraday lows at 18,819,
also a six-month bottom. Since their December peaks, Nasdaq futures have
plummeted 16%, while S&P 500 futures are down roughly 10%, underscoring the
tech-heavy index’s vulnerability to trade disruptions.

“We are in a period of heightened uncertainty—tariff
tensions, conflicting macroeconomic indicators, and ongoing global conflicts,” said Dr. Kirill Kretov from CoinPanel. “Many investors are exiting the stock market, viewing even traditionally
relatively safe assets as too risky, and are reallocating into proven safe
havens like gold.”

“The challenge is that the vast majority of market
participants (myself included) don’t really know where the bottom is,” he added. “And with
someone as powerful and unpredictable as President Trump, things can reverse
course dramatically at any moment.”

“There are many themes that are
playing out in financial markets right now,” said Kathleen Brooks, Research Director at XTB. “The hardest hit sectors in Europe
include industrials, tech, consumer discretionary and financials. The sell-off
in tech, industrials, and consumer discretionary can be explained by their
exposure to global growth and global supply chains, while financials in Europe
are selling off as the prospect of deeper rate cuts by the ECB could knock the
banks’ net interest income in the coming months.”

Why Are Markets Reacting
So Strongly?

The
sharp sell-off can be attributed to several factors tied to Trump’s tariff
policy:

1. Trade War Fears: Analysts warn that the
   tariffs, which Trump described as “reciprocal” but halved from what
   trading partners impose on the U.S., could provoke retaliatory measures
   from countries like China and the European Union. This tit-for-tat
   escalation threatens to derail global trade flows, a critical driver of
   economic growth.
2. Inflation and Cost Pressures: Higher tariffs are expected
   to increase the cost of imported goods, potentially reigniting inflation
   in the U.S. and beyond. Companies like Nike, Ralph Lauren, and Estée
   Lauder saw after-hours declines of 6%, 5%, and 3.5%, respectively, on
   April 2, as their reliance on international supply chains and sales came
   under scrutiny.
3. Economic Growth Concerns: The tariffs coincide with
   already softening economic data. A Federal Reserve Bank of Atlanta
   forecast suggests U.S. GDP could contract at an annual rate of 1.8% in Q1
   2025, raising recession risks. Goldman Sachs recently upped its U.S.
   recession probability to 35% and slashed its S&P 500 year-end target
   to 5,700, reflecting a gloomier outlook.
4. Sector-Specific Impacts: European firms like Puma
   (-9%), Adidas (-8.6%), Volvo Cars (-9%), and Maersk (-7.4%) saw steep
   declines, highlighting vulnerabilities in retail, automotive, and shipping
   sectors. In the U.S., the Stoxx Autos index dropped over 2% as Trump’s 25%
   tariffs on imported vehicles compounded existing duties on steel and
   aluminum.

From Wall Street to Main
Street

The
market’s reaction isn’t just a numbers game—it has tangible consequences. For
instance, a U.S. consumer buying a car with 50% foreign-sourced parts could
face price hikes of $3,000 to $8,000, according to S&P Global Mobility.
European exporters, meanwhile, fear losing competitiveness in the U.S. market,
a key revenue source. Maersk, a global trade bellwether, saw its 7.4% drop as a
signal of broader supply chain disruptions ahead.

Investors
are also flocking to safe-haven assets. Gold futures hit a record $3167 today,
with Goldman Sachs raising its year-end forecast to $3,300, driven by central
bank buying and market uncertainty. U.S. 10-year Treasury yields slumped to a
five-month low, and the Japanese yen strengthened as risk-off sentiment took
hold.

“Overall, stocks
are down around the world, but these are not traditional panic moves,
suggesting that there is still some expectation that deals can be cut to reduce
some of the impact from tariffs. The FX market is not moving on the back of
yield differentials today, instead, it is moving on the back of growth outlooks
after the US trade policy threw a grenade into the global economy,” added Brooks.

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S&P 500 Expert Predictions

Will the
declines persist? Jochen Stanzl of CMC Markets described the mood as a “bleak
atmosphere on trading floors worldwide,” suggesting sustained volatility
Volatility

In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad

In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad
Read this Term until
retaliatory measures and economic impacts clarify. UBS cut its S&P 500
year-end forecast from 6,600 to 6,400, anticipating a potential 25% drawdown
from recent peaks if a recession materializes.