U.S. futures drop as Trump tariffs spark trade war fears

May 05, 2025 (MLN): U.S. stock index futures fell on Monday after President Donald Trump reignited concerns about the effects of a global trade war by introducing new tariffs, while markets awaited the Federal Reserve's monetary policy decision this week.

On Sunday, Trump announced a 100% tariff on movies produced outside the U.S. but offered little clarity on how the levies would be implemented, as Reuters reported.

Movie and television production companies that film overseas fell in premarket trading. Netflix was down 3.3%, while Walt Disney and Warner Bros. Discovery were off 1.5% and 2.7%, respectively.

Among other stocks, class B shares of Warren Buffett's Berkshire Hathaway fell 2.1% after the investor said he will step down as CEO of the conglomerate.

At 05:05 a.m. ET, Dow E-minis were down 287 points, or 0.69%, S&P 500 E-minis were down 48.5 points, or 0.85%, and Nasdaq 100 E-minis were down 191.75 points, or 0.95%.

Markets heaved a sigh of relief last week on signs of easing trade tensions between the U.S. and China, amid a tit-for-tat tariff policy that has rattled global financial markets of late.

On Friday, the S&P 500 notched its ninth session of gains, a streak last seen in 2004.

This week, the spotlight will be on the U.S. Federal Reserve, which is widely expected to keep interest rates on hold.

Commentary from central bank policymakers will be in focus to gauge their approach to monetary policy easing this year amid tariff impacts.

Data last week showed the world's biggest economy contracted in the first quarter for the first time since 2022.

Traders rushed to import goods before tariffs kicked in, raising worries about slowing growth despite the labor market's strength.

"The resilience of the April jobs data will make it easier to wave off the perverse negative print in last week's GDP report, leaving the Fed firmly ... in wait-and-see mode this week," Wrightson ICAP analysts said.

Traders are pricing in 25 basis points of easing only by July, and see a total of 116 points of cuts by the end of the year, according to data compiled by LSEG.

Investor attention will be on how companies are navigating tariff-induced uncertainty.

Chipmaker Onsemi and dental and medical products distributor Henry Schein are among companies reporting results before the bell, while carmaker Ford and data analytics firm Palantir are scheduled after markets close.

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