What matters in U.S. and global markets today.
By Naomi Rovnick, markets enterprise correspondent
Animal imagery, popular in financial markets since the 1870s, will dominate conversations today as traders question if U.S. stocks that turned bullish this week after skirting bear market territory have just executed a dead cat bounce.
Investors eyeing Thursday's drop in U.S. equity futures after two days of Wall Street gains driven by the White House mulling softer China tariffs might see this as the end of one of those brief bear market reversals with feline characteristics.
But beware anxiety about minor market fluctuations, known as Chicken Little thinking, obscuring prospects of what consultancy Capital Economics predicts as further rallies ahead before U.S. President Donald Trump's volatile trade rhetoric shifts again.
Today's Market Minute
* U.S. Treasury Secretary Scott Bessent said 145% China tariffs are not sustainable
* Relief rally fizzles as markets take stock of Trump's U-turns
* Nestle warns of the unclear indirect impact of tariffs on consumers, customers and currencies
* Global central bankers face the U.S. Federal Reserve becoming a less stable source of global monetary policy influence.
* German business sentiment unexpectedly improved in April
Was that a dead cat bounce?
S&P 500 futures traded 0.7% lower on Thursday morning and contracts tracking the tech-focused Nasdaq 100 lost 0.9%, echoing stock market falls across Europe as nerves about erratic White House policy appeared to grip markets once again.
It is not just tariffs on investors' minds either, as worries linger about Trump's fickle stance towards the Federal Reserve after the U.S. president lambasted Fed chair Jerome Powell for not cutting interest rates, then rowed back.
Mirroring stock markets, the brief respite for the weakened dollar has also faded, with the U.S. currency down 0.5% to $1.137 per euro, heading closer to its recent 3-1/2 year low.
More than 90% of the S&P 500 companies that have reported quarterly earnings so far have mentioned tariff risks, according to transcripts crunched by Reuters, more than doubling the rate of trade war comments from the previous earnings season.
That suggests the burst of confidence that lifted risk appetite this week could well be fragile, as businesses deter hiring and investment plans to assess how trade tensions are impacting their customers and suppliers.
Nestle, the world's largest packaged goods group, has just warned that the indirect effect of tariffs on everything from currencies to commodities prices remains unclear, sending its shares 0.7% lower despite better-than-expected quarterly sales.
On the plus side, U.S. Treasury Secretary Scott Bessent's comments on Wednesday that high tariffs between the U.S. and China are not sustainable signalled openness to de-escalating tensions between the world's two largest economies.
And even if tariff nerves have peaked, mounting U.S. slowdown signals, which strategists at BCA Research say are not fully priced into markets, are the next potential source of pessimism that could prolong bear market trends.
S&P Global's "flash" purchasing managers index for the U.S. dropped to 51.2 points for April, still in growth territory but its weakest reading since December 2023.
Chart of the day
Trump's first 100 days in office will likely draw to a close with a major underperformance in U.S. assets after a rush out of dollars that called its global reserve status into question.
That is placing pressure on other currencies where a surge of haven demand could well be economically disruptive.
The euro has surged 5.3% month-to-date in a trend that threatens to bludgeon exporters already facing punitive U.S. tariffs, while the rocketing Swiss franc has spurred talk of currency intervention by the nation's central bank.
Today's events to watch
* G20 finance ministers and central bank governors will hold a press conference after the International Monetary Fund and World Bank Spring meetings
* Donald Trump meets with Norway's prime minister and finance minister in Washington
* Kansas City Fed manufacturing index
* European Commission President Ursula von der Leyen meets British Prime Minister Keir Starmer in London
