U.S. stock index futures fell on Tuesday after President Donald Trump’s plans for potential pharma tariffs renewed fears about the impact of the global trade war, further dampening investor sentiment amid subdued corporate earnings.
Trump said late on Monday that he would announce pharma tariffs over the next two weeks, his latest action on levies that have roiled global financial markets over the past months.
Drugmakers Eli Lilly (NYSE:LLY) and Pfizer (NYSE:PFE) were flat-to-slightly-lower in premarket trading after the news, which offset optimism stemming from his order aimed at reducing the approval time for pharmaceutical manufacturing plants.
The latest development follows Trump’s announcement on Sunday about imposing tariffs on foreign-made movies. Wall Street closed lower on Monday, with the benchmark S&P 500 snapping a nine-session winning streak.
Ford Motor (NYSE:F) was the latest to suspend its annual outlook on Monday, joining a host of companies that shelved their forecasts in April. The automaker also flagged a hit of about $1.5 billion from the levies, sending its shares down 1.9% in premarket trading.
Tariff-driven uncertainty has led consumers, businesses and even the U.S. Federal Reserve to adopt a wait-and-watch mode as they struggle to navigate the tariffs and gauge their impact.
The Trump administration suggested last week that potential deals with trading partners were underway, but markets have seen no concrete results on that front.
The latest tariffs on the film and pharma industries are undermining the "likely misplaced" optimism that markets feel about the U.S. striking trade deals in the near future, said Marc Ostwald, chief economist, ADM Investor Services International.
At 07:15 a.m. ET, Dow E-minis were down 188 points, or 0.47%, S&P 500 E-minis were down 34 points, or 0.60%, and Nasdaq 100 E-minis were down 174 points, or 0.86%.
The Fed starts its two-day meeting on Tuesday, with the central bank widely expected to stay put on interest rates. Comments from policymakers will be scrutinized for any clues hinting at their stance on monetary policy easing this year.
"We see little market-moving information emerging... with a steady-as-she-goes payroll print for April, stable inflation numbers and prospects of engaging in trade deals, this should keep the Fed in wait-and-see mode for now," BNP Paribas (OTC:BNPQY) analysts said.
Traders see about 79 basis points of policy easing by the end of 2025, with the first cut coming only in July, according to data compiled by LSEG.
Markets will also assess trade data later in the day, with economists expecting the deficit to increase in March.
Data analytics firm Palantir (NASDAQ:PLTR)’s shares were down 6.8% after investors were unimpressed by the company’s modest revenue beat and in-line profit.
DoorDash (NASDAQ:DASH) was down 5% after the meal delivery firm said it would buy Deliveroo (OTC:DROOF) in a deal valuing the British rival at about 2.9 billion pounds ($3.86 billion). The U.S. firm’s quarterly revenue missed estimates, disappointing investors.
Datadog (NASDAQ:DDOG) gained 3.8% after the software firm lifted its annual forecast.($1 = 0.7505 pounds)