US stock futures dropped on Thursday as Wall Street assessed the recently announced trade truce between Presidents Trump and Xi, which has lessened expectations for another interest rate cut and anticipated earnings from Big Tech.
Dow Jones Industrial Average (YM=F) futures fell by 0.3%. Similarly, futures for the S&P 500 (ES=F) also dropped 0.3%, while the tech-focused Nasdaq 100 (NQ=F) saw a decline of 0.5%.
Market momentum has slowed since Federal Reserve Chair Jerome Powell remarked that another rate cut in December is “not a foregone conclusion — far from it.” These comments follow the Fed’s decision to reduce its benchmark interest rate by a quarter percentage point and underscore existing divisions among policymakers.
The meeting between Trump and Xi did not provide the anticipated boost to stocks, despite establishing what amounts to a one-year trade truce. The US will reduce tariffs on fentanyl-related products from China in exchange for a year-long pause in China’s restrictions on rare earth exports, with China also committing to resume purchasing American soybeans.
Investors are now preparing for quarterly earnings from tech giants such as Apple (AAPL) and Amazon (AMZN), scheduled to release results later in the day, following mixed earnings from some of their notable peers, including Alphabet (GOOG), Meta (META), and Microsoft (MSFT) reported on Wednesday.
Alphabet’s stock surged over 7% after its quarterly earnings exceeded expectations; however, Meta declined nearly 8% while Microsoft fell nearly 3% as investors evaluated the companies’ future projections.
