U.S. stock futures dropped on Thursday as a short-lived rally faded. Investors weighed the unpredictable trade moves by the Trump administration and mixed corporate earnings reports.
Stocks are having a hard time building on Wednesday’s rally, which was driven by hints that President Trump may be softening his tough stance on trade and the Federal Reserve. Investors are struggling to keep up with the administration’s announcements and Trump’s changing positions on tariffs.
While a deal with China remains a possibility, markets still see this as some way off for now with neither side willing to look weak ahead of a potential negotiation. Chinese authorities this morning said that If the US really wants to resolve the issue, it should lift all unilateral tariff measures against China.
Further developments on this front in the US session could either hurt or help sentiment and will be worth monitoring.
On the earnings front, IBM (NYSE:IBM) shares dropped 8% in U.S. premarket trading after disappointing results missed high expectations. In Europe, traders navigated a wave of earnings, with Unilever (NYSE:UL) rising on better-than-expected sales, while BNP Paribas fell due to a profit decline.
Procter & Gamble (NYSE:PG) lowered its yearly sales and profit forecasts on Thursday after reporting a larger-than-expected drop in third-quarter sales. This happened as consumers cut back on spending due to economic uncertainty and the ongoing trade war.
Investors are keeping an eye on trade updates and a packed schedule of results from major companies like Procter & Gamble, Merck (NYSE:MRK), and Alphabet (NASDAQ:GOOGL) for more market direction.
Something which I found interesting is Deutsche Bank strategists cutting their year-end S&P 500 target by 12%, blaming the impact of tariffs on U.S. companies. The new target of 6,150 points offers a 14% potential increase from Wednesday’s close but only allows the index to recover losses since its peak in February.
Economic Data Releases
For now, focus will shift to earnings, but may still be overshadowed by tariff developments.
March data on durable goods, home sales, and weekly jobless claims will be closely watched for insights into the economy. Minneapolis Fed President Neel Kashkari is also set to speak later today.
Chart of the Day - Dow Jones Index (DJIA)
From a technical standpoint, the Dow Jones printed a significant shooting star rejection candle at a key resistance area around the 40000 mark.
The drop continued today to bridge the price gap created on Tuesday with the index’s next move up in the air.
Price action remains mixed while yesterday’s pullback means that the RSI also remains bearish and below the neutral 50 mark.
Immediate support rests at 39232 before the 38472 and 38100 handles come into focus.
Immediate resistance rests at 39588 before the key 40000 handle and 40537 handles come into focus.
Dow Jones Daily Chart, April 24, 2025
Source: TradingView.com
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