Hours ahead of the tariff deadline, President Donald Trump signed an executive order imposing duties ranging from 10% to 41% on US imports from foreign countries.
The deadline set by Trump came with little to no hope of an extension, as made clear by the White House in its stance.
However, China is facing an Aug 12 deadline to reach a durable tariff agreement with Trump’s administration after Beijing and Washington reached preliminary deals in May and June to end tit-for-tat tariffs and a cut-off of rare earth minerals.
“The Aug 1 announcement on reciprocal tariffs is somewhat worse than expected,” analysts at Societe Generale said.
The CBOE Volatility index, also known as Wall Street’s fear gauge, jumped to a more than two-week high andwas last up 19.35 points.
At 7.04am, Dow E-minis were down 489 points, or 1.1%, S&P 500 E-minis were down 74.5 points, or 1.17%, and Nasdaq 100 E-minis were down 309.25 points, or 1.32%.
Meanwhile, Amazon slid 8.3% in premarket trading after growth in its cloud computing unit failed to impress investors, in contrast to robust gains reported by AI-focused rivals Alphabet and Microsoft.
Apple posted its current-quarter revenue forecast well above Wall Street estimates, but CEO Tim Cook warned US tariffs would add US$1.1 billion in costs over the period. The stock was up 1.5%.
Yesterday, the S&P 500 and the Nasdaq retreated from intraday record highs to end lower as AI-driven enthusiasm following blockbuster earnings from Microsoft and Meta Platforms fizzled out.
Microsoft briefly surpassed US$4 trillion in market value, becoming only the second publicly traded company to reach this milestone after Nvidia.
A key driver for Wall Street on Friday could be US jobs data. Estimates show a rise of 110,000 in July payrolls, while the jobless rate is seen rising to 4.2% from 4.1%, according to economists polled by Reuters.
A strong reading could trim bets for a September interest rate cut, after data this week showing stronger-than-expected second-quarter GDP and an uptick in June inflation influenced expectations on the rate path.
Traders now see a 58.8% chance of the Fed holding rates steady in September as well, according to CME’s FedWatch tool.
Trump said today that the Federal Reserve’s board should assume control if chair Jerome Powell continues to refuse to lower interest rates.
Powell’s remarks following the Fed’s policy decision on Wednesday – when rates were kept unchanged – showed no urgency for a September rate cut.