Stock Index Futures Slip as Weak U.S. Earnings Add to Tariff Concerns

March S&P 500 E-Mini futures (ESH25) are down -0.35%, and March Nasdaq 100 E-Mini futures (NQH25) are down -0.42% this morning as concerns over U.S. tariffs and weak corporate earnings weighed on sentiment.

Investors are facing an increasingly uncertain outlook for the global economy amid concerns over the impact of U.S. tariffs. U.S. President Donald Trump said on Sunday that both reciprocal tariffs and specific additional sector-based tariffs would take effect on April 2nd, posing a significant risk to the global economy.

Investors also digested some disappointing corporate earnings reports. FedEx (FDX) slumped over -6% in pre-market trading after the shipping giant, which is considered an economic barometer, reported weaker-than-expected FQ3 adjusted EPS and cut its full-year guidance. Also, Nike (NKE) slid more than -4% in pre-market trading after the sportswear giant warned of further declines in revenue and profitability in the current quarter under its turnaround strategy, with the growing trade war adding to uncertainty. 

In yesterday’s trading session, Wall Street’s main stock indexes closed lower. Accenture (ACN) slumped over -7% and was the top percentage loser on the S&P 500 after its chief executive stated that federal spending cuts were beginning to affect the company’s revenue. Also, Microchip Technology (MCHP) slid more than -6% and was the top percentage loser on the Nasdaq 100 after the struggling semiconductor company announced that it had hired Macquarie Group to assist in selling its wafer fabrication plant in Arizona and launched an underwritten public offering of $1.35 billion in depositary shares. In addition, Rivian Automotive (RIVN) fell over -4% after Piper Sandler downgraded the stock to Neutral from Overweight. On the bullish side, Darden Restaurants (DRI) climbed over +5% and was the top percentage gainer on the S&P 500 after the Olive Garden owner provided solid FY25 comparable sales guidance.

Economic data released on Thursday showed that the U.S. Philly Fed manufacturing index came in at 12.5 in March, stronger than expectations of 8.8. Also, U.S. February existing home sales unexpectedly rose +4.2% m/m to 4.26M, stronger than expectations of 3.95M. In addition, the number of Americans filing for initial jobless claims in the past week rose +2K to 223K, compared with the 224K expected. At the same time, the Conference Board’s leading economic index for the U.S. fell -0.3% m/m in February, weaker than expectations of -0.2% m/m.

Meanwhile, Wall Street is bracing for a quarterly event known as “triple-witching,” during which derivatives contracts linked to equities, index options, and futures expire, prompting traders collectively to either roll over their positions or initiate new ones. About $4.5 trillion worth of options tied to individual stocks, indexes, and exchange-traded funds are set to mature today, according to an estimate from Citigroup. 

The U.S. economic data slate is empty on Friday. However, investors will focus on a speech from New York Fed President John Williams.

U.S. rate futures have priced in an 83.8% probability of no rate change and a 16.2% chance of a 25 basis point rate cut at the next FOMC meeting in May.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.221%, down -0.28%.

The Euro Stoxx 50 Index is down -0.63% this morning, extending losses from the prior session as worries about the global economic outlook continued to dampen sentiment. Travel stocks led the declines on Friday after a major fire near London’s Heathrow Airport forced its closure. Despite Friday’s drop, the benchmark index is on track to end the week slightly higher. Data from the statistical agency Insee released on Friday showed that France’s manufacturing climate indicator slightly weakened in March as tariff threats weighed on the already struggling sector. Meanwhile, market participants are closely monitoring Germany’s upper house vote on the debt brake amendment later today, which has already passed in the lower house. Investors are also awaiting the Eurozone’s preliminary consumer confidence data for March due later in the day. In corporate news, Douglas AG (DOU.D.DX) tumbled over -21% after the German perfume and cosmetics retailer slashed its full-year guidance.

France’s Business Survey was released today.

The French March Business Survey came in at 96, weaker than expectations of 97.

Asian stock markets today closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down -1.29% and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.20%. 

China’s Shanghai Composite Index ended lower today, marking a third straight session of losses, as investors pointed to a lack of fresh catalysts following a recent sharp rally. Technology stocks were under heavy selling pressure on Friday as investors continued to take profits. Automobile and consumer stocks also lost ground. The benchmark index ended the week lower. Bearish calls have begun to emerge, with BofA Securities cautioning this week about a “meaningful correction soon.” Morgan Stanley noted a cooling in investor sentiment, expecting heightened volatility ahead. The caution indicates that the market has already factored in the positive developments from the National People’s Congress earlier this month, where policymakers vowed to support economic growth and AI development. Meanwhile, the looming April 2nd deadline for reciprocal tariffs and additional sector-specific levies proposed by U.S. President Donald Trump added to the negative sentiment. In other news, Fitch Ratings stated that China’s economic growth outlook remains muted due to escalating trade tensions, a prolonged property slump, and debt challenges faced by local government financing vehicles. In corporate news, CK Hutchison Holdings slid over -3% in Hong Kong after the conglomerate controlled by the Li Ka-Shing family reported a 27% year-over-year decline in annual profit. 

Japan’s Nikkei 225 Stock Index closed lower today as trading resumed after a holiday. The Nikkei index initially climbed, trying to catch up with Wednesday’s Fed-driven rally on Wall Street, but later reversed those gains and closed lower due to concerns about the impact of U.S. tariffs. Heavy industry and automobile stocks slumped on Friday. At the same time, financial stocks outperformed, driven by expectations that the Bank of Japan will proceed with gradual interest rate hikes. The benchmark index notched its second consecutive weekly gain. Government data released on Friday showed that Japan’s core inflation reached 3.0% in February, and an index excluding the effect of fresh food and fuel costs increased at the fastest rate in nearly a year, signaling widening price pressures. The data followed BOJ Governor Kazuo Ueda’s warning, issued after the central bank’s decision to hold interest rates steady on Wednesday, that rising food prices and stronger-than-expected wage growth could drive underlying inflation higher. Meanwhile, Marcel Thieliant, head of Asia-Pacific at Capital Economics, said, “The strength in underlying inflation in February suggests that the [BOJ] could hike rates at its next meeting in May.” However, he added that uncertainty surrounding the impact of U.S. tariffs could postpone a BOJ move until July. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -4.61% to 21.54.

The Japanese February National Core CPI stood at +3.0% y/y, stronger than expectations of +2.9% y/y.

Pre-Market U.S. Stock Movers

FedEx (FDX) slumped over -6% in pre-market trading after the shipping giant, which is considered an economic barometer, reported weaker-than-expected FQ3 adjusted EPS and cut its full-year guidance. 

Nike (NKE) slid more than -4% in pre-market trading after the sportswear giant warned of further declines in revenue and profitability in the current quarter under its turnaround strategy, with the growing trade war adding to uncertainty. 

Lennar (LEN) fell over -2% in pre-market trading after the homebuilder issued weak FQ2 guidance for new orders and average sales price.

Super Micro Computer (SMCI) gained about +1% in pre-market trading after JPMorgan upgraded the stock to Neutral from Underweight with a price target of $45.

Luminar Technologies (LAZR) climbed over +8% in pre-market trading after reporting better-than-expected Q4 results. 

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Friday - March 21st

Carnival Corp (CCL), Miniso (MNSO), Sunlands Tech (STG), Sow Good (SOWG).