US stock futures turn negative as Trump tariffs, recession fears weigh

U.S. stock futures pared gains in Asia hours to slip into negative territory on Thursday, as lingering concerns over a potential trade war and recession fears outweighed optimism from softer-than-expected inflation data.

Futures tied to the S&P 500 fell 0.6% to 5,574.0 points, while Nasdaq 100 Futures declined 0.9% to 19,451.50 as of 01:52 ET (05:52 GMT). Dow Jones Futures futures dropped 0.4%.

The index futures reversed earlier gains in Asian trading, which came after the U.S. consumer price index (CPI) data reinforced expectations of Federal Reserve rate cuts this year.

The February CPI report showed inflation rose 2.8% year-on-year, slightly below forecasts of 2.9% and down from January’s 3% increase.

In regular trading on Wednesday, the S&P 500 closed 0.5% higher, while the NASDAQ Composite jumped 1.2%. The Dow Jones Industrial Average closed 0.2% lower.

The cooling inflation initially buoyed equity futures in the Asian session, with investors pricing in at least three rate cuts this year, starting in June.

Meanwhile, President Donald Trump’s decision to impose 25% tariffs on steel and aluminum imports triggered retaliatory threats from key trading partners, including the European Union and Canada.

The uncertainty surrounding global trade policy added to fears that prolonged protectionist measures could weaken economic growth, potentially leading the economy into a recession.

Investors remain cautious ahead of next week’s Federal Reserve policy meeting, where officials will provide further guidance on the timing of potential rate cuts.