US equity futures slide from the latest record high as concerns around trade tariffs and a disappointing outlook from Walmart weighed on sentiment. As of 8:00am ET, contracts on the S&P 500 and the Nasdaq 100 slipped about 0.3% as Mag7 names are mixed with Semis lower. Palantir was among the biggest losers in US premarket trading, on track to extend Wednesday’s 10% slide, after Defense Secretary Pete Hegseth outlined plans to cut military spending by 8% over the coming years. Walmart plunged 8%, the most in a year, after the company's guidance disappointed Wall Street. Europe's Stoxx 50 continues its ascent rising 0.6% led by real estate and auto sector. The potential for a pausing of the Fed’s QT hinted in yesterday's FOMC minutes helped a late-day rally and Trump says a bigger China trade deal is possible but says there is a shot clock for Ukraine to find a deal. Bond yields are down 2-3bps with the USD weaker as the yen continues its recent surge. Commodities are seeing strength in both Ags and Metals; gold set a fresh all-time high above $2950. The macro data focus is on Jobless Claims and the Leading Indicator Index.
In premarket trading, Walmart plunged 8% after forecasting lower-than-expected profit for the full year, citing an uncertain economic environment. Some retail stocks decline after Walmart’s profit outlook: Costco (COST) -1.4%, Dollar Tree (DLTR) -1%, Target (TGT) -2%. Video game platform Vimeo and used car retailer Carvana also slumped in premarket after disappointing earnings. China’s Alibaba was a bright spot, adding more than 10% after third-quarter revenues beat estimates. Its result also helped lift Chinese e-commerce peers, with JD.com Inc. and PDD Holdings Inc. both rallying in premarket trading. Amazon is among the laggards in the Magnificent Seven stocks (GOOGL +0.04%, AMZN -0.6%, AAPL -0.3%, MSFT +0.2%, META -0.5%, NVDA +0.06% and TSLA +0.3%). Here are some other notable movers:
The mixed corporate results added to market jitters over Donald Trump’s threats to widen trade tariffs and his wavering support for Ukraine and its European allies. The geopolitical tensions lifted gold prices to a new record above $2,954 an ounce.The dollar and Treasury yields slipped after Federal Reserve’s minutes revealed policymakers had discussed pausing or slowing its balance-sheet runoff.
“We saw a shift in the tone of the US on how they are going to approach the Russia-Ukraine environment, and this shifting tone is bringing about some uncertainty for markets,” said Shaniel Ramjee, investment manager at Pictet Asset Management.
Data on US weekly jobless claims are due later, with economists expecting the figure to hold more or less steady from the previous week. The report may also give an early insight into the impact of the Trump administration’s sweep of the federal workforce.
Europe’s Stoxx 600 index edged higher after Wednesday’s decline, though sombre earnings capped the recovery. The
Stoxx 600 climbed 0.3% after logging its largest drop this year on Wednesday even as shares in Renault SA, Mercedes-Benz Group AG and Airbus SE slipped after their results, while US-exposed defense stocks, such as BAE Systems Plc and Qinetiq Group Plc, also lost ground. Resource stocks are leading gains, while US-exposed defense names were undermined by US plans to cut military spending. Here are some of the biggest movers on Thursday:
Earlier in the session, stocks in Asia fell, as US-Ukraine tensions and the Fed's commentary on interest-rate cuts hurt sentiment. The MSCI Asia Pacific Index dropped 0.6%, the most in more than two weeks, with Hong Kong-listed shares among the biggest drags. Alibaba fell ahead of reporting earnings, while Meituan declined on a plan to expand its pension plan. Shares traded lower in Japan and Australia. The Fed’s openness to keeping rates on hold for longer, combined with increasing concerns about geopolitical tensions and trade wars, dented sentiment. Markets softened as investors watch whether remarks by US President Donald Trump that were highly critical of Ukraine’s leader might take “an ugly turn,” and what that would mean for Europe, said Charu Chanana, chief investment strategist at Saxo Markets.
In FX, the Bloomberg Dollar Spot index falls 0.3% as the Japanese yen strengthens 0.9% against the dollar, rising to its strongest level since December amid growing speculation the Bank of Japan will hike rates sooner rather than later. The Aussie dollar also outperforms its G-10 peers, adding 0.6% against the greenback after hiring topped estimates.
In rates, treasuries are steady, with US 10-year yields drop 3bps to 4.50%. Treasuries briefly ticked higher after Bessent said terming out US debt is “a long way off.” Bunds also little changed; gilts lag by about 3bp in the 10-year sector, bunds by about 1bp. Japanese 10-year government bond yields hit its highest level since 2009 on expectations of a strong inflation print on Friday. US session includes weekly jobless claims data, 30-year TIPS auction and four Fed speakers. Treasury sells $9b 30-year TIPS in a new-issue auction at 1pm New York time
In commodities, oil prices tread water, with WTI near $72.20 a barrel. Spot gold rises $20 to a record high near $2,955/oz. Bitcoin rises 1% above $97,000.
Looking at today's calendar, US economic data calendar includes February Philadelphia Fed business outlook and weekly jobless claims (8:30am) and January Leading index (10am). Fed speaker slate includes Goolsbee (9:35am), Musalem (12:05pm), Barr (2:30pm) and Kugler (5pm)
Market Snapshot
Top Overnight News
Tariffs
A more detailed look at global markets courtesy of Newsquawk
APAC stocks mostly declined with sentiment dampened by ongoing geopolitical uncertainty and after US President Trump's latest comments in which he repeated criticism against Ukrainian President Zelensky and said he will announce tariffs on cars, semiconductors, chips, pharma and probably lumber over the next month or sooner. ASX 200 was pressured with mining, materials and financials among the worst performing sectors, while participants digested a slew of earnings releases including from the likes of Rio Tinto and Fortescue. Nikkei 225 suffered from the ill effects of a firmer currency and slipped beneath the 39,000 level as Japan's 10yr yield initially climbed to its highest since November 2009. Hang Seng and Shanghai Comp conformed to the downbeat mood amid trade frictions and US tariff threats, while China unsurprisingly maintained the Loan Prime Rates. However, the mainland index eventually returned to flat territory and there were recent reports that US President Trump is eying a bigger and better trade deal with China that would include substantial investment and commitments for China to buy more US products.
Top Asian News
European bourses (STOXX 600 +0.3%) opened mixed, but sentiment has gradually improved as the morning progressed to display a more positive picture in Europe, paring back the hefty losses seen in the prior session. European sectors hold a positive bias vs initially opening mixed. Basic Resources is the clear outperformer, with gains facilitated by strength in metals prices alongside post-earning upside in Anglo American (+3%) and Rio Tinto (+1%). Banks are towards the middle of the pile; Lloyds (+3.6%) saw its profit plunge 20%, but optimism stems from a GBP 1.7bln share buyback. For the Autos sector, both Mercedes (-2.5%) and Renault (-2.4%) dip after their results.
Top European News
FX
Fixed Income
Commodities
Geopolitics
US Event Calendar
Fed speakers
DB's Jim Reid concludes the overnight wrap
Markets put in a divergent performance over the last 24 hours, with US assets continuing to reach fresh highs, even as the rest of the world struggled on the back of President Trump’s tariff threats and concerns about Ukraine. By the close, that meant the S&P 500 (+0.24%) was at another record, whilst the 10yr Treasury yield (-1.8bps) fell to 4.53%. But over in Europe it was a very different story, as the STOXX 600 (-0.91%) suffered its biggest daily decline of 2025 so far, and a bond sell-off sent 10yr yields up to a 3-week high across much of the continent. Moreover, that slump has continued in Asia overnight, as the Nikkei (-1.30%) and the Hang Seng (-0.93%) have both lost ground, and the 10yr Japanese government bond yield has hit a post-2009 high of 1.43%. So the moves mark a pretty big shift from the trend so far in 2025, as US risk assets have generally underperformed their global counterparts, particularly in Europe.
As a reminder, the latest slump for European assets came as they reacted to President Trump’s tariff threats on Tuesday night. That’s where he said he’d impose automobile tariffs “in the neighbourhood of 25%”, and that for semiconductors and pharmaceuticals “it’ll be 25% and higher, and it’ll go very substantially higher over a course of a year”. And even though President Trump said that the tariff rate on autos would probably be announced on April 2, the sector quickly saw decent losses in anticipation of that. For instance, Germany’s DAX (-1.80%) experienced the biggest decline of the major European indices, with automakers like Volkswagen (-2.78%) and BMW (-2.28%) underperforming. Similarly in the US, automakers like Stellantis (-2.11%) and General Motors (-0.69%) also lost ground. And there were struggles for trade-sensitive areas more broadly, as the NASDAQ Golden Dragon China Index (which includes companies traded in the US which do a majority of business in China) fell -0.38%.
European markets also weren’t helped by the latest developments over Ukraine, as there was a reversal in hopes for a resolution of the conflict. That followed a social media post from President Trump that was highly critical of Ukrainian President Zelenskiy, referring to him as “a dictator without elections”. This followed President Zelenskiy’s comments earlier in the day that US proposals on Ukrainian minerals were “not a serious conversation”. So that backdrop led to a renewed underperformance for regional assets, including Ukraine dollar bonds and CEE currencies.
There wasn’t much respite for European fixed income either, where yields on 10yr bunds (+6.4bps), OATs (+8.4bps) and BTPs (+9.4bps) all hit a 3-week high. One factor behind that were comments from the ECB’s Isabel Schnabel, who said in an FT interview that they should begin to discuss a “pause or halt” to rate cuts, and that inflation risks were becoming “skewed to the upside”. So even though another rate cut is still widely expected at the next meeting in two weeks’ time, there’s now more doubt among investors about whether that’ll be followed up by many more. Indeed, overnight index swaps are only pricing in 36bps of rate cuts by the meeting-after-next in April, meaning that one 25bp cut is fully priced, but then there’s only a 44% probability of a second cut by then.
On top of Schnabel’s comments, investors also had to grapple with the ongoing prospect of higher defence spending and more borrowing. We should get a better idea on this after the German election on Sunday, where there’s a lot of attention on whether the next government will relax the constitutional debt brake. Our economists have published an extensive primer on this weekend’s vote (link here), which runs over what the different outcomes would mean for the likelihood of a fiscal regime change.
Here in the UK, gilts lost ground as well after the January CPI print surprised on the upside. It showed headline inflation jumping up to +3.0% (vs +2.8% expected), which is its highest level in 10 months. Moreover, the core CPI reading was even higher, jumping up to a 9-month high of +3.7%, in line with expectations. So just like their counterparts on the continent, 10yr gilt yields (+5.3bps) hit a 3-week high of 4.61%, which came as investors dialled back the likelihood of rate cuts from the Bank of England. And more widely, there are still several global inflationary pressures in the pipeline, as Bloomberg’s Commodity Spot Index (+0.24%) moved up to a fresh two-year high yesterday.
Over in the US, Treasury yields moved lower after the minutes of the Fed’s January meeting featured a discussion about slowing the pace of QT. Specifically, it said that given “the potential for significant swings in reserves over coming months related to debt ceiling dynamics, various participants noted that it may be appropriate to consider pausing or slowing balance sheet runoff until the resolution of this event”. For more on the balance sheet discussions, see our US rates strategists’ reaction here. On rates, the minutes echoed the signal that there was no hurry to adjust policy, as “many participants noted that the committee could hold the policy rate at a restrictive level if the economy remained strong and inflation remained elevated.” But with the QT news, that meant by the close, 10yr yields were down -1.7bps to 4.53%, while 2yr yields were down -3.8bps to 4.27%. That’s continued overnight as well, with the 10yr yield down another -2.0bps to 4.51%.
US equities also saw a much better performance than in Europe, with the S&P 500 (+0.24%) advancing to a new record. The advance was led by defensive sectors, with health care (+1.26%) and consumer staples (+0.79%) leading the way, while energy stocks (+0.70%) also outperformed as WTI crude oil prices (+0.56% to $72.25/bbl) advanced for the second day in a row. However, homebuilders saw a significant decline after the latest housing data surprised on the downside. In particular, housing starts fell to an annualised pace of 1.366m in January (vs. 1.390m expected), which was a -9.8% drop from the previous month.
Overnight in Asia, markets have continued to lose ground, with all the major equity indices moving lower. In Japan, that’s come amidst mounting expectations of future rate hikes, which have pushed the 10yr yield up to a post-2009 high of 1.43%, whilst the Japanese Yen has moved up to its strongest against the dollar so far in 2025, at 150.30. The Nikkei itself is also down -1.30%, and consensus is expecting headline inflation to jump up to +4.0% in tomorrow’s CPI report, the highest in two years.
Elsewhere in the region, Australia’s S&P/ASX 200 is down -1.14%, which follows a stronger-than-expected employment report for January out this morning. That showed employment up +44k (vs. +20k expected), so investors dialled back the likelihood of another rate cut from the RBA in response, and the Australian Dollar has strengthened +0.28% against the US Dollar overnight. Elsewhere in the region, those equity declines are also evident, with the Hang Seng (-0.93%), the KOSPI (-0.84%), the CSI 300 (-0.25%) and the Shanghai Comp (-0.03%) all losing ground as well. And looking forward, even US equity futures are pointing towards a slip back from their record highs, with those on the S&P 500 down -0.29%.
To the day ahead, and data releases from the US include the weekly initial jobless claims, and the Conference Board’s leading index for January. Over in the Euro Area, we’ll also get the European Commission’s preliminary consumer confidence reading for February. From central banks, we’ll hear from the Fed’s Goolsbee, Musalem, Barr and Kugler, along with the ECB’s Makhlouf and Nagel. Lastly, today’s earnings releases include Walmart.