U.S. Futures Slide as Trump Tariffs Stir Market Tensions Ahead of Fed Meeting
U.S. stock index futures fell sharply on Monday morning after former President Donald Trump reignited fears of a global trade war by announcing a 100% tariff on foreign-produced movies. The sudden policy move added uncertainty to a market already on edge ahead of the Federal Reserve’s key interest rate decision this week.
In a surprise announcement on Sunday, Trump said the new tariffs aimed to bolster domestic film production, but offered little detail on implementation. The ambiguity sent ripples through the entertainment industry, with Netflix dropping 3.3% in premarket trading, while Walt Disney and Warner Bros. Discovery fell 1.5% and 2.7%, respectively.
The broader market responded swiftly. As of 05:05 a.m. ET, Dow E-minis were down 287 points (–0.69%), S&P 500 E-minis dropped 48.5 points (–0.85%), and Nasdaq 100 E-minis slid 191.75 points (–0.95%).
Fed Holds the Spotlight This Week
While markets had enjoyed a brief rally last week following signs of improving U.S.–China trade relations, Trump’s unexpected tariff announcement has disrupted that momentum. Investors now shift their focus to the Federal Reserve, which is widely expected to keep interest rates unchanged at its upcoming policy meeting.
Analysts are watching closely for any changes in tone from the central bank regarding the possibility of monetary easing later this year, especially amid growing signs of economic pressure from global trade dynamics.
Recent data showed that the U.S. economy contracted in Q1, the first decline since 2022. Economists attribute the dip to a rush in imports ahead of expected tariff hikes, raising concerns about the broader growth outlook despite a robust labor market.
Berkshire Hathaway and Other Movers
Aside from the entertainment sector, shares of Berkshire Hathaway dipped 2.1% after legendary investor Warren Buffett announced his plan to step down as CEO. The market reaction reflects uncertainty around the future leadership of one of the world’s most closely watched investment firms.
Investor attention is also focused on earnings results this week. Onsemi and Henry Schein are set to report before the opening bell, while Ford and Palantir Technologies will report after the market closes. These updates will be key in understanding how companies are navigating tariff-induced market volatility.
Outlook: Wait-and-See Mode for Now
According to analysts at Wrightson ICAP, the strong April jobs report may help offset concerns about last week’s negative GDP print. “The Fed remains firmly in wait-and-see mode,” they said in a client note.
As of now, traders are pricing in a 25-basis-point rate cut by July and a total of 116 basis points in cuts by year-end, based on data from LSEG.
Markets are bracing for a volatile week, as policy risks, corporate earnings, and economic indicators continue to collide.