Stock Futures Plunge as Trade War with China Escalates After Trump’s Tariff Hike
April 10, 2025 – New York, NY — U.S. stock futures tumbled early Thursday, reversing course after a record-breaking rally the day before, as escalating trade tensions between the U.S. and China renewed investor fears.
S&P 500 futures (ES=F) dropped 1.98% to 5,382.50, while futures tied to the tech-heavy Nasdaq 100 (NQ=F) fell by 2.4%. Dow Jones Industrial Average futures (YM=F) also declined sharply, down roughly 500 points or 1.3%. Meanwhile, the 10-year Treasury yield (^TNX) slipped to 4.3%, reflecting heightened demand for safe-haven assets.
The sharp retreat follows a historic surge in markets on Wednesday, when President Donald Trump paused several major tariff hikes on key U.S. trading partners. The decision prompted one of Wall Street’s strongest single-day rallies since World War II, as investors briefly welcomed a potential cooling of trade tensions.
However, optimism faded quickly after Trump escalated the U.S.-China trade battle, hiking tariffs on Chinese imports to an unprecedented 125%. The move was met with swift retaliation from Beijing, which raised tariffs on American goods to 84%, intensifying fears of a prolonged economic conflict.
“The trade war is now turning into a direct confrontation between the U.S. and China,” analysts at Rabobank said Thursday. “We could again be seeing escalation and de-escalation at the same time, pulling markets in different directions.”
JP Morgan analysts warned that despite the temporary truce with some allies, the broader trade conflict is far from over. “Trump’s move is merely the end of the beginning,” they said, cautioning that the underlying risks to the U.S. economy remain unresolved.
Additional tariffs still in place include a 10% baseline on most trading partners, 25% duties on steel and aluminum, and 25% on auto imports — measures that could continue to push prices higher and slow economic growth.
With investor sentiment swinging sharply and uncertainty mounting, markets are bracing for more volatility in the days ahead.