There is selling pressure in the equity futures market to begin the week, with market participants showing some nervousness about threats to the Fed’s independence and China threatening to retaliate against countries that curtail trade with China because the U.S. forces the issue in its own trade negotiations.
Currently, the S&P 500 futures are down 54 points and are trading 0.9% below fair value, the Nasdaq 100 futures are down 247 points and are trading 1.4% below fair value, and the Dow Jones Industrial Average futures are down 310 points and are trading 0.7% below fair value.
The threats at hand are showing up elsewhere, too. The inflation-sensitive 10-yr note yield is up six basis points to 4.39% after climbing to 4.41% earlier, the U.S. Dollar Index is down 1.2% to 98.15, hitting its lowest level since 2022, and gold futures are up 2.6% to $3,415.40/troy oz.
There has been some confusing messaging coming out of Washington about the Fed situation. During Thursday’s session, a senior White House official told CNBC that President Trump’s Truth Social Post should not be seen as a threat to fire Jerome Powell. On Friday, though, NEC Director Kevin Hassett said the president and his team were looking into whether the president can fire Fed Chair Powell.
It is one more item that has added to the market’s profound sense of uncertainty and lack of confidence in buying with conviction. Moreover, it has effectively overshadowed the good earnings news heard from Netflix (NFLX) after Thursday’s close.
Shares of NFLX are up 2.0% in pre-market trading, yet that gain has been eclipsed by a 3% drop in NVIDIA (NVDA). Reuters is reporting that Huawei is planning mass shipments of a new AI chip in China that can compete with NVIDIA.
Other mega-cap stocks are weak in pre-market trading, including Amazon.com (AMZN), which was downgraded by Raymond James to Outperform from Strong Buy.
This weakness is an overhang on the broader market, which will be digesting a host of earnings reports this week. Roughly a quarter of the S&P 500 will report results for the March quarter, including Tesla (TSLA) and Alphabet (GOOG).
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Originally Posted on April 21, 2025 – Early weakness driven by dual threats
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