US Stocks Likely To Open Lower After The Worst Selloff Since 2020: Tariff Announcement Was '100% Smoot Hawley Disguised As Thoughtful Policy,' Says Expert
U.S. stock futures declined on Friday after a bloodbath on Thursday following the introduction of President Donald Trump‘s tariffs. Futures of major benchmark indices were lower in premarket trading.
Fueled by a broad market downturn, the Dow Jones plummeted by a staggering 1,679 points, its fifth-largest drop ever, while the S&P 500 and Nasdaq suffered their biggest single-day losses since June and March 2020, respectively.
Trump, however, dismissed the tariff-induced selloff and said, “The market is going to boom, the stock is going to boom, the country is going to boom.”
The 10-year Treasury bond yielded 3.94% and the two-year bond was at 3.61%. The CME Group's FedWatch tool shows markets pricing in a 69.4% likelihood of the Federal Reserve maintaining current interest rates through its May meeting.
| Futures | Change (+/-) |
| Dow Jones | -1.00% |
| S&P 500 | -0.78% |
| Nasdaq 100 | -0.54% |
| Russell 2000 | -1.42% |
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, declined in premarket on Friday. The SPY was down 0.71% to $532.87, while the QQQ declined 0.62% to $447.85, according to Benzinga Pro data.
Cues From Last Session:
Technology sectors bore the brunt of Thursday’s U.S. stock market downturn. Specifically, Apple Inc. (NASDAQ:AAPL) shares plummeted approximately 9.3%, marking their steepest single-day decline since March 2020. Nvidia Corp. (NASDAQ:NVDA) also saw a significant drop, tumbling 7.8%, while Amazon.com Inc. (NASDAQ:AMZN) shares fell by 8.98%. Across the broader market, consumer discretionary, energy, and information technology stocks registered the most substantial losses within the S&P 500.
In contrast, consumer staples stocks stood out, bucking the prevailing negative trend and closing the session higher. This sector’s resilience was highlighted by Lamb Weston Holdings Inc. (NYSE:LW), whose shares surged 10% after the company released third-quarter financial results that exceeded expectations and provided FY25 sales guidance above analyst estimates.
Economic data released Thursday presented a mixed picture. U.S. initial jobless claims decreased by 6,000 to 219,000 for the week ending March 29, falling below the anticipated 225,000. Additionally, the U.S. trade deficit narrowed to $122.7 billion in February, improving from $130.7 billion in January and slightly better than the forecasted $123.5 billion. However, the ISM services PMI declined to 50.8 in March, down from 53.5 in February and below market expectations of 53.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | -5.97% | 16,550.60 |
| S&P 500 | -4.84% | 5,396.52 |
| Dow Jones | -3.98% | 40,545.93 |
| Russell 2000 | -6.59% | 1,910.55 |
Insights From Analysts:
CNBC’s Jim Cramer compared Trump’s tariffs to historical tariff regimes in the U.S., in an X post. he said, “It is not pro-tariff v. anti-tariff. It’s about accomplishing what’s good for our country while not having a Smoot-Hawley situation.”
The Smoot-Hawley Tariff Act, enacted in 1930, was a US law that significantly increased tariffs on imported goods, intended to protect American businesses and farmers, but ultimately worsened the Great Depression by triggering a global trade war.
However, he added that tariff-induced selloff on Thursday was “100% Smoot Hawley disguised as thoughtful policy. The market was RIGHT to go down.”
AQR Capital Management’s Chief Investment Officer, Cliff Asness, took to X on Thursday to voice his criticism of tariff proponents, specifically disputing the assertion that tariffs result in deflation instead of inflation.
His remarks were a direct response to Anthony Pompliano, the Founder & CEO of Professional Capital Management and a well-known Bitcoin advocate, who had previously claimed, “Tariffs don't create inflation. The exact opposite happens."
Creative Planning’s chief market strategist, Charlie Bilello, noted that the VIX index reached its highest closing level since Aug. 5, 2024.
He suggested this increase in fear, coupled with lower stock prices, presents enhanced opportunities for investors with a long-term perspective. Bilello also pointed to historical trends, indicating that the S&P 500 has historically delivered “higher than average” returns following significant surges in volatility.
He shared data showing that after a comparable spike on Aug. 5, 2024, the S&P 500 returned 6% in one month, 11% in three months, and 18% over six months. On average, Bilello highlighted, the S&P 500 has gained 12% six months after such volatility spikes and 21% after a year.
In an X post, Bilello summarized, “More Fear = More Opportunity.”
See Also: How to Trade Futures
Upcoming Economic Data
Here’s what investors will keep an eye on Friday:
- March’s U.S. employment report, unemployment rate, and hourly wages data will be out by 8:30 a.m. ET.
- Fed Chairman Jerome Powell will speak at 11:25 a.m. ET.
- Fed Governor Michael Barr will speak at 12:00 p.m. and Fed Governor Christopher Waller will speak at 12:45 p.m. ET.
Stocks In Focus:
- American Shared Hospital Services (NYSE:AMS) was up 0.34% in premarket on Friday ahead of its earnings before the opening bell. Analysts expect a quarterly earnings of 1 cent per share on revenue of $7.70 million.
- Neuroone Medical Technologies Corp. (NASDAQ:NMTC) slumped 36.05% after the company disclosed a common stock public offering.
- Simulations Plus Inc. (NASDAQ:SLP) was up 2.50% after posting stronger-than-expected results for its second quarter and issuing an upbeat FY25 earnings forecast.
- Sangamo Therapeutics Inc. (NASDAQ:SGMO) surged 32.41% after announcing a new agreement with pharmaceutical giant Eli Lilly And Co. (NYSE:LLY), granting the company a worldwide exclusive license to leverage the company’s novel proprietary neurotropic adeno-associated virus (AAV) capsid, STAC-BBB.
- GameStop Corp. (NYSE:GME) jumped 3.98% after its CEO, Ryan Cohen, acquired 500,000 shares of the company.
- BioNexus Gene Lab Corp. (NASDAQ:BGLC) dropped 26.96% after the company said that it will enact a 1-for-10 reverse stock split effective Monday to meet Nasdaq’s bid price requirements.
- Mullen Automotive Inc. (NASDAQ:MULN) zoomed 83.64% after it stated that its U.S.-assembled Mullen and Bollinger commercial EV inventory is tariff-exempt.
- CXApp Inc. (NASDAQ:CXAI) gained 40.06% after the company reported business performance results for 2024 and announced a net revenue retention rate of 101%.
Commodities, Gold, And Global Equity Markets:
Crude oil futures were trading lower in the early New York session by 3.57% to hover around $64.56 per barrel.
Gold Spot US Dollar declined 0.97% to hover around $3,083.92 per ounce. Its fresh record high stood at $3,168.04 per ounce. The U.S. Dollar Index spot was higher by 0.48% at the 102.564 level.
Asian markets closed on a lower note on Friday. India's S&P BSE Sensex, Japan's Nikkei 225, Australia's ASX 200, China’s CSI 300, Hong Kong's Hang Seng, and South Korea's Kospi index fell. European markets were also lower in early trade.
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