FameEX Hot Topics | Nasdaq Futures Drop 2.7% as Trump’s Trade War Shakes Markets

U.S. stock market futures are in the red, signaling a volatile week ahead as traders respond to recent developments. Futures linked to the three major U.S. stock indexes have taken a sharp downturn after President Donald Trump’s announcement of new trade tariffs on China, Mexico, and Canada. In addition, nearly half a trillion dollars exited the crypto market in the last 24 hours, further amplifying market uncertainty.

On February 3, Nasdaq 100 futures dropped almost 2.7%, according to Finviz. Other U.S. equity futures showed similar declines, with the Russell 2000 small-cap index down 3.2%, the S&P 500 falling 2%, and futures related to the Dow Jones Industrial Average dropping about 1.5%. The futures sell-off reflects investor concerns over Trump’s trade policies and the potential impact on global markets.

Equity futures are financial contracts that enable investors to speculate on or hedge against the future value of U.S. stock indexes such as the Nasdaq 100. This index tracks the 100 largest non-financial companies listed on the U.S. stock exchange. The recent downturn in futures markets came in direct response to Trump’s tariff impositions, which are set to take effect on February 4.

The tariffs include a 25% levy on imports from Canada and Mexico, along with a 10% tariff on China. Analysts, such as George Saravelos from Deutsche Bank, have warned that markets will need to significantly adjust the “trade war risk premium,” as these tariffs were much higher than anticipated. Wolfe Research’s Tobin Marcus added that markets may need to take Trump’s entire tariff agenda more seriously, suggesting that Monday could bring additional volatility.

Meanwhile, the cryptocurrency market has also been hit hard. Over the past 24 hours, the total market capitalization of cryptocurrencies fell by more than 13%, as $450 billion exited the space. This has resulted in a market cap of $3.12 trillion, its lowest level since mid-November. Despite this short-term downturn, some experts believe that Trump’s trade war could lead to long-term gains for Bitcoin, with a weakening dollar and lower U.S. government yields potentially pushing its price higher in the future.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.