U.S. Stocks May Lack Direction Following Yesterday’s Pullback

The major U.S. index futures are currently pointing to a roughly flat open on Thursday, with stocks likely to show a lack of direction following the sharp pullback seen in the previous session.

While President Donald Trump’s announcement that he will impose 25 percent tariffs on auto imports may generate some negative sentiment, the news may already be priced into the markets after the White House revealed Trump would be making the announcement during the trading day on Wednesday.

However, Trump’s conflicting remarks about tariffs may lead to continued uncertainty on Wall Street, keeping some traders on the sidelines.

Trump told reporters the reciprocal tariffs set to take effect next week will “very lenient” but threatened in a Truth Social post early this morning that he would impose far larger tariffs than currently planned “if the European Union works with Canada in order to do economic harm to the USA.”

Traders may also be reluctant to make significant moves ahead of the release of the Federal Reserve’s preferred readings on consumer price inflation on Friday.

Stocks moved sharply lower over the course of the trading day on Wednesday, giving back ground after trending higher over the past few sessions. The tech-heavy Nasdaq led the pullback amid significant weakness in the technology sector.

The major averages climbed off their worst levels going into the close but remained negative. The Nasdaq plunged 372.84 points or 2.0 percent to 17,889.01, the S&P 500 slumped 64.45 points or 1.1 percent to 5,712.20 and the Dow fell 132.71 points or 0.3 percent to 42,454.79.

The sharp pullback by the Nasdaq came as big-name tech stocks came under pressure, with shares of Nvidia (NVDA) plunging by 6.0 percent.

Shares of Tesla (TSLA) have also tumbled by 5.6 percent, while shares of Alphabet (GOOGL) and Meta Platforms (META) slumped by 3.2 percent and 2.5 percent, respectively.

The weakness in the tech sector may partly have reflected ongoing uncertainty about President Donald Trump’s tariff plans.

Trump said during an interview with Newsmax on Tuesday that new tariffs would “probably be more lenient than reciprocal,” because reciprocal tariffs would be “very tough for people.”

However, while Trump also said there would be exceptions to the tariffs, he noted there would be “not too many exceptions.”

Stocks saw further downside after the White House said Trump plans to announce new tariffs on auto imports later this afternoon.

In U.S. economic news, the Commerce Department released a report showing an unexpected increase by new orders for U.S. manufactured durable goods in the month of February.

The Commerce Department said durable goods orders climbed by 0.9 percent in February after spiking by an upwardly revised 3.3 in January.

Economists had expected durable goods orders to slump by 1.0 percent compared to the previously reported 3.2 percent surge.

Excluding a jump by orders for transportation equipment, durable goods orders still rose by 0.7 percent in February after inching up by 0.1 percent in January. Ex-transportation orders were expected to rise by 0.2 percent.

Semiconductor stocks turned in some of the market’s worst performances on the day, dragging the Philadelphia Semiconductor Index down by 3.3 percent.

Computer hardware, networking and software stocks also saw notable weakness, contributing to the slump by the tech-heavy Nasdaq.

Outside of the tech sector, brokerage, pharmaceutical and retail stocks also moved notably lower, while oil producer stocks bucked the downtrend amid an increase by the price of crude oil.

Commodity, Currency Markets

Crude oil futures are edging down $0.11 to $69.54 a barrel after climbing $0.65 to $69.65 a barrel on Wednesday. Meanwhile, after slipping $3.40 to $3,022.50 an ounce in the previous session, gold futures are surging $36.30 to $3,058.80 an ounce.

On the currency front, the U.S. dollar is trading at 150.69 yen versus the 150.57 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0796 compared to yesterday’s $1.0754.

Asia

Asian stocks ended mixed on Thursday, with mainland Chinese and Hong Kong stocks rising after U.S. President Donald Trump said reciprocal duties that are set to be announced next week will be “very lenient” and that tariffs on China could be reduced to facilitate a deal on the sale of ByteDance Ltd.’s social video platform TikTok to an American company.

A cautious undertone prevailed elsewhere in the region after Trump announced a 25 percent tariff on auto imports to boost domestic manufacturing.

Gold ticked higher on safe-haven demand, while oil prices dipped after rising on Wednesday, buoyed by data showing a decline in U.S. inventories and renewed efforts from the U.S. to limit Venezuelan and Iranian oil exports.

China’s Composite Index edged up by 0.2 percent to 3,373.75 as Trump’s comments about TikTok suggested there is room for negotiations.

Additionally, Chinese industrial companies’ profits declined at the start of the year but showed some signs of improvement.

Hong Kong’s Hang Seng Index added 0.4 percent to close at 23,578.80. Chinese automakers, which have limited exposure to the U.S. markets rose, with EV giant BYD surging 2.8 percent.

Japanese markets ended notably lower as automakers plunged on Trump’s tariff announcement.

The Nikkei 225 Index fell 0.6 percent to 37,799.97, while the broader Topix index settled marginally higher at 2,815.47. Toyota Motor and Honda both fell over 2 percent, while Mazda Motor plummeted 6 percent and Subaru lost 5 percent.

Seoul stocks tumbled, with the Kospi falling 1.4 percent to 2,607.17 on U.S. trade policy concerns.

Hyundai Motor slumped 4.3 percent and its affiliate Kia Corp. declined 3.5 percent. Semiconductor stocks also fell, with SK Hynix falling 3.3 percent as news of U.S. restrictions on advanced semiconductors from China emerged.

Australian markets ended lower to snap a five-session winning streak, with technology stocks bearing the brunt of the selling.

The benchmark S&P/ASX 200 Index dipped 0.4 percent to 7,969, while the broader All Ordinaries Index closed 0.5 percent lower at 8,185.50.

WiseTech Global fell over 2 percent and NEXTDC plunged 6.5 percent. Discount chain Reject Shop soared 109.5 percent following a $259 million takeover bid from Canadian retailer Dollarama.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index slipped 0.2 percent to 12,305.79.

Europe

European stocks hit a two-week low on Thursday after U.S. President Donald Trump ratcheted up transatlantic trade tensions by announcing a new 25 percent tariff on all auto imports.

In a late-night post on his Truth Social platform, Trump threatened to impose even steeper tariffs on the European Union and Canada if they collaborate to harm the U.S. economy.

European Commission President Ursula von der Leyen said she “deeply regrets” Trump’s latest tariffs move. “The EU will continue to seek negotiated solutions, while safeguarding its economic interests,” she said.

The German DAX Index is down by 1.0 percent, the U.K.’s FTSE 100 Index is down by 0.7 percent and the French CAC 40 Index is down by 0.6 percent.

Automakers fell sharply on tariff concerns, with Stellantis NV, BMW and Volkswagen showing significant moves to the downside.

Swiss eye care firm Alcon AG has also come under pressure after it acquired a majority stake in Aurion Biotech.

Meanwhile, Symrise, a global supplier of fragrances and flavors, has moved higher after raising dividend and confirming outlook.

German chemical firm Henkel has also edged up slightly after voluntarily recalling 1,068 units of its Tec Italy Shampoo Totale.

U.S. Economic News

The U.S. economy grew by slightly more than previously estimated in the fourth quarter of 2024, according to revised data released by the Commerce Department on Thursday.

The report said gross domestic product surged by 2.4 percent in the fourth quarter compared to the previously reported 2.3 percent jump. Economists had expected the pace of GDP growth to be unrevised.

The Commerce Department said the upward revision primarily reflected a downward revision to imports, which are a subtraction in the calculation of GDP. A downward revision to consumer spending limited the upside.

The Labor Department also released a report on Thursday showing first-time claims for U.S. unemployment benefits edged slightly lower in the week ended March 22nd.

The report said initial jobless claims slipped to 224,000, a decrease of 1,000 from the previous week’s revised level of 225,000.

Economists had expected jobless claims to inch up to 225,000 from the 223,000 originally reported for the previous week.

The Labor Department said the less volatile four-week moving average also dipped to 224,000, a decrease of 4,750 from the previous week’s revised average of 228,750.

At 10 am ET, the National Association of Realtors is due to release its report on pending home sales in the month of February. Pending home sales are expected to jump by 1.5 percent in February after plunging by 4.6 percent in January.

The Treasury Department is scheduled to announce the results of this month’s auction of $44 billion worth of seven-year notes at 1 pm ET.

At 4:30 pm ET, Richmond Federal Reserve President Thomas Barkin is due to deliver the H. Parker Willis Lecture in Political Economy at Washington and Lee University.

Boston Federal Reserve President Susan Collins is also scheduled to speak on the economy and monetary policy in a fireside chat sponsored by the Insurance Women’s Investment Network, 100 Women in Finance, and Wellington Management at 4:30 pm ET.