US Stock Futures Drop Amid Mixed Signals From White House On US-China Trade: ‘Focus On Quality In A Diversified Manner,’ Says Expert – Invesco QQQ Trust, Series 1 (NASDAQ:QQQ), SPDR S&P 500 (ARCA:SPY)

U.S. stock futures fell on Thursday after a two-day advance. Futures of major benchmark indices were lower in premarket.

The administration’s mixed signals on tariffs fueled investor anxiety. While President Donald Trump hinted at a deal with China while speaking to reporters on Tuesday after market hours, the Treasury Secretary Scott Bessent denied slashing steep tariffs on Chinese imports unilaterally on Wednesday. China also refuted Trump’s trade talk assertion.

Investors will also keep an eye on tech giant and Google’s parent Alphabet Inc.‘s GOOG GOOGL slated to be released later today.

Meanwhile, the 10-year Treasury bond yielded 4.35% and the two-year bond was at 3.83%. The CME Group’s FedWatch tool’s projections show markets pricing a 93.9% likelihood of the Federal Reserve keeping the current interest rates unchanged in its May meeting.

The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, fell in premarket on Thursday. The SPY was down 0.51% to $532.67, while the QQQ declined 0.71% to $451.33, according to Benzinga Pro data.

Cues From Last Session:

Information technology, consumer discretionary, and communication services sectors led U.S. stocks higher Wednesday, with the Dow Jones jumping over 400 points, though all major indices closed well below their session highs after the Dow had surged over 1,100 points earlier.

Most S&P 500 sectors closed positively, but consumer staples and energy stocks finished the session lower.

Philip Morris International Inc. PM reported strong first-quarter results and raised its FY25 adjusted EPS outlook, while Tesla Inc. TSLA shares gained over 5% after its first-quarter earnings release.

Economic data showed new single-family home sales rose 7.4% to an annualized 724,000, the S&P Global services PMI fell to 51.4 in April, and the manufacturing PMI increased to 50.7.

As of Wednesday, the Nasdaq 100 index was down 15.88% from its previous high of 22,222.61 points. The S&P 500 index was 12.55% lower, as compared to the last record high of 6,147.43 points. On the other hand, Dow Jones was 12.13% down from its 52-week high of 45,073.63 points.

The Dow Jones index jumped 420 points or 1.07% to 39,606.57, whereas the S&P 500 index surged 1.67% to 5,375.86. Nasdaq Composite ended 2.50% higher at 16,708.05, and the small-cap gauge, Russell 2000, also advanced 1.53% to 1,919.14.

Insights From Analysts:

Acknowledging the swift and often daily shifts in tariff and geopolitical landscapes, Scott Wren, senior global market strategist at Wells Fargo, noted, “With the pace of change on the tariff and geopolitical fronts moving fast and sometimes adjusting on a day-to-day basis, investors are wondering what they might do to help navigate the uncertainties.”

To navigate these uncertainties, Wren has advised investors to maintain exposure in higher-quality equities and fixed income, emphasizing the need for a plan to withstand market volatility while pursuing growth.

Wren stated, “The first rule of thumb for our plan is to focus on quality in a diversified manner.”

Pointing to the stronger balance sheets, dependable cash flows, easy credit access, and share buyback capabilities of larger companies, Wren said, “We continue to favor large- and mid-capitalization equities over small-cap.”

Additionally, Wells Fargo favors the energy sector and holds favorable ratings on Information Technology, Financials, and Communication Services, according to Wren, who explained, “We believe these sectors feature long-term growth drivers and robust balance sheets. We suggest investors put funds to work in these sectors at current market levels. In our view, the pullback in stocks offers long-term investors an attractive entry point.”

After Trump blasted Fed Chairman Jerome Powell in a Truth Social post on Monday and said that “Powell’s termination can’t come quickly enough,” during a Tuesday press conference, he changed his tone, saying, “I have no intention of firing him”.

“Essentially, if there is a recession, President Trump will likely blame Fed Chairman Powell for failing to cut key interest rates fast enough,” said Louis Navellier of Navellier and Associates.

Talking about the ongoing uncertainty surrounding Trump’s policies, Ed Yardeni of Yardeni Research said, “Trump’s Tariff Turmoil has put the world on edge. A new world order may be the ultimate result, but for now we’ve got the New World Disorder, leaving everyone scrambling to adjust to Trump’s unpredictable policy pivots. The economic fallout is uncertain. The uncertainty is keeping Wall Street on edge.”

See Also: How to Trade Futures

Upcoming Economic Data

Here’s what investors will keep an eye on Thursday:

• Initial jobless claims for the week ended April 19, along with March’s durable-goods orders data, will be out by 8:30 a.m. ET.

• Existing home sales for March will be released by 10:00 a.m., and Minneapolis Fed President Neel Kashkari will speak at 5:00 p.m. ET.

Stocks In Focus:

• Bristol-Myers Squibb Co. BMY fell 0.19% in premarket on Thursday as it is expected to report earnings before the opening bell. Analysts expect a quarterly earnings of $1.49 per share on revenue of $10.70 billion.

• PepsiCo Inc. PEP was down 0.11% as Wall Street expects it to report earnings of $1.49 per share on revenue of $17.77 billion before the opening bell.

• Procter & Gamble Co. PG declined 0.96% as it is expected to report earnings before the opening bell. Analysts expect a quarterly earnings of $1.53 per share on revenue of $20.11 billion.

• Alphabet Inc. GOOG was 0.84% lower as Wall Street expects it to report earnings of $2.02 per share on revenue of $88.87 billion after the closing bell.

• Nokia Oyj NOK tumbled 7.91% after posting weaker-than-expected earnings for its first quarter and confirming its guidance for the rest of the year.

• Alaska Air Group Inc. ALK plunged 7.18% after it warned of a slower demand as its second-quarter profit outlook fell short of expectations.

Commodities, Gold, And Global Equity Markets:

Crude oil futures were trading higher in the early New York session by 0.48% to hover around $62.57 per barrel.

Gold Spot US Dollar rose 1.43% to hover around $3,335.49 per ounce. Its last record high stood at $3,500.33 per ounce. The U.S. Dollar Index spot was lower by 0.50% at the 99.3430 level.

Asian markets were mixed on Thursday. Japan’s Nikkei 225 and Australia’s ASX 200 indices advanced. While Hong Kong’s Hang Seng, India’s S&P BSE Sensex, China’s CSI 300, and South Korea’s Kospi index fell. European markets were mostly lower in early trade.

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