Stocks Fluctuate on Tariff Concern as Dollar Slips: Markets Wrap

(Bloomberg) — US stock futures fluctuated after back-to-back gains on Wall Street as investors scaled back their expectations of quick progress in the US-China trade dispute.

S&P 500 contracts were steady after sliding as China maintained a defiant stance over tariffs imposed by the Trump administration. Stocks in Europe pared a decline. The dollar weakened as unpredictable White House policy moves boosted demand for the Swiss franc, the yen and gold as relative havens. Treasuries advanced.

On the earnings front, International Business Machines Corp. shares slumped 7% in premarket trading after its results fell short of high market expectations. Procter & Gamble Co. fell after cutting its sales and profit outlook, citing tariffs and volatility in consumer demand.

Economic data out Thursday showed that applications for US unemployment benefits picked up slightly, reflecting a stable labor market. Initial claims increased by 6,000 to 222,000 in the week ended April 19, in line with the median forecast by economists.

Stocks were at risk of a mild pullback after Wednesday’s rally, which was spurred by signs President Donald Trump is rethinking the most aggressive elements of his stances on trade and the Federal Reserve. The market moves underscore how investors are grappling to keep up with pronouncements from officials in the administration and frequent back-and-forth by Trump on his tariffs.

“You’re just seeing conflicting statements and noise coming from the US, where the overall narrative is just all over the place,” said Peter Kinsella, head of foreign-currency strategy at Union Bancaire Privee Ubp SA in London. “It’s impossible to trade.”

Meanwhile, Deutsche Bank AG strategists led by Bankim Chadha slashed their year-end S&P 500 target by 12%, citing the blow to US companies from tariffs. While the new target of 6,150 points leaves 14% upside from Wednesday’s close, it means the index will only recover losses sustained since its February peak. Up until this change, the Deutsche Bank team had one of the most bullish views for the benchmark.

“With the potential impact of the announced tariffs large and likely to fall disproportionately on US companies, we lower our S&P 500 EPS estimate for 2025 from $282 to $240,” the strategists wrote in a note, adding that the consensus view is at risk of further downgrades.

Trump signaled Wednesday that the US is going to have a fair deal with China, adding that the country may receive a new tariff rate in the next two to three weeks. Bessent tempered some of the optimism over that development, as he said the US was not looking to unilaterally lower tariffs and that a full trade deal could take two to three years.

China, in turn, said Thursday that the US should revoke all unilateral tariffs and that Washington needs to show sincerity if it wants to hold trade negotiations.

“In terms of geopolitical risk, there’s a chance that we have reached a bottom, even if that’s not necessarily the case for markets,” said Francois Antomarchi, a fund manager at Degroof Petercam asset management. “Trump has touched the limits of what he can inflict on corporate America. That being said, there’s always a possibility he starts acting on another political front and triggers more volatility.”

Some of the main moves in markets:

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