U.S. Stocks May Give Back Ground Following Yesterday’s Historic Rally

Stocks are likely come under pressure in early trading on Thursday, giving back ground following the historic rally seen over the course of the previous session. The major index futures are currently pointing to a notably lower open for the markets, with the S&P 500 futures down by 1.9 percent.

Traders may look to cash in on the spike seen in afternoon trading on Wednesday after President Donald Trump announced a 90-day pause on new “reciprocal tariffs.”

Ongoing concerns about rising trade tensions between the U.S. and China may weigh on the markets, as Trump excluded the country out of the pause and even raised the tariff on Chinese goods to 125 percent.

Uncertainty about what will happen between now and the end of the 90-day pause may also lead to some apprehension on Wall Street.

“While the 90-day pause is welcome news for stocks, the lack of long-term clarity may become more of an issue as time goes on,” said AJ Bell investment director Russ Mould.

The futures remained sharply lower even after the Labor Department released a report unexpectedly showing a slight decrease by U.S. consumer prices in the month of March.

The report said the consumer price index edged down by 0.1 percent in March after rising by 0.2 percent in February. Economists had expected consumer prices to inch up by 0.1 percent.

Excluding food and energy prices, the core consumer price index crept up by 0.1 in March after rising by 0.2 percent in February. Core prices were expected to rise by 0.3 percent.

The report also said the annual rate of consumer price growth slowed to 2.4 in March from 2.8 percent in February. Economists had expected the pace of price growth to slow to 2.6 percent.

The annual rate of core consumer price growth also fell to 2.8 percent in March from 3.1 percent in February. Core price growth was expected to dip to 3.0 percent.

A separate report released by the Labor Department showed first-time claims for U.S. unemployment benefits crept slightly higher in the week ended April 5th.

Following the nosedive seen over the past several sessions, stocks showed an astonishingly strong move back to the upside during trading on Wednesday. The major averages all moved sharply higher, posting their biggest one-day gains in years.

The major averages saw continued strength late in the day, reaching new highs for the session. The Nasdaq soared 1,857.06 or 12.2 percent to 17,124.97, the S&P 500 spiked by 474.13 points or 9.5 percent to 5,456.90 and the Dow surged 2,962.86 points or 7.9 percent to 40,608.45.

In overseas trading, stock markets across the Asia-Pacific region moved sharply higher during trading on Thursday. Japan’s Nikkei 225 Index skyrocketed by 9.1 percent, South Korea’s Kospi shot up by 6.6 percent and China’s Shanghai Composite Index jumped by 1.2 percent.

The major European markets have also shown a substantial move back to the upside on the day. While the German DAX Index is up by 5.1 percent, the French CAC 40 Index is up by 4.7 percent and the U.K.’s FTSE 100 Index is up by 4.0 percent.

In commodities trading, crude oil futures are slumping $1.56 to $60.79 a barrel after surging $2.77 to $62.35 a barrel on Wednesday. Meanwhile, after soaring $89.20 to $3,079.40 an ounce in the previous session, gold futures are jumping $68.30 to $3,147.70 an ounce.

On the currency front, the U.S. dollar is trading at 145.11 yen versus the 146.76 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1117 compared to yesterday’s $1.0949.

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