Turbulent Markets: Trade War Strains and Stock Swings

U.S. stock index futures fell following a temporary tariff reduction by President Trump, after a significant rally the previous day. Trump's move affected China differently, raising its tariffs. Analysts expressed concerns over the ongoing U.S.-China trade war impacting market stability. Investors anticipate inflation data and possible Fed responses.

U.S. stock index futures witnessed a sharp decline on Thursday, following a record-setting rally as President Donald Trump announced a temporary reduction of tariffs on multiple countries while increasing them on China.

Just 24 hours after imposing new tariffs on several trading partners, Trump lifted the S&P 500 and Nasdaq indices to historical highs, before further escalating tensions by hiking tariffs on Chinese imports to 125% from 104% on Wednesday. Experts predict ongoing volatility between the two economic powerhouses.

Despite the recent surge, the market remains below pre-tariff levels. Investors are now anxious about forthcoming consumer price data and potential Federal Reserve actions amid fears of hindered global growth and inflation. The CBOE Volatility Index, Wall Street's 'fear gauge,' also saw recent fluctuations. Key economic indicators, including jobless claims and bank earnings, will further influence market sentiment.

(With inputs from agencies.)