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Investing.com - U.S. stock futures pointed lower on Thursday, after equities notched a comeback rally in the previous session that was driven by a White House announcement that President Donald Trump will exempt some automakers from his punishing tariffs. Detroit’s Big 3 car manufacturers all posted share price gains, while hopes were raised that other products could also see some relief from the levies. Elsewhere, analysts say the European Central Bank is due to roll out its last "easy cut" to interest rates, but its path ahead remains murky.
1. Futures lower
U.S. stock futures inched lower as investors assessed fresh tariff actions from the Trump administration and looked ahead to key labor market data.
By 03:36 ET (08:36 GMT), the Dow futures contract had dipped by 207 points or 0.5%, S&P 500 futures had fallen by 35 points or 0.6%, and Nasdaq 100 futures had retreated by 175 points or 0.8%.
The main averages on Wall Street ended the prior session higher, stemming the sharpest decline in almost three months, after the White House said Trump would exempt some automakers from his 25% import tariffs on Canada and Mexico. The move, which came on the heels of the levies coming into effect just after midnight on Tuesday, raised hopes that the White House’s trading stance may be open for negotiation.
Investors were also buoyed following Trump’s reiteration of a commitment to slashing taxes during an address to Congress on Tuesday evening.
Sentiment was dented by weaker-than-expected private payrolls data, while a separate report showing a pick-up in prices for inputs in the crucial U.S. services sector exacerbated worries that Trump’s tariffs may be refueling inflationary pressures. However, growth in the services industry -- which accounts for the bulk of U.S. economic output -- unexpectedly accelerated.
2. Trump tariff exemptions
Trump’s exemption for some automakers is due to be in place for one month as long as they comply with existing free trade rules, the White House said.
Bolstered by the announcement, shares in the so-called "Big 3" automakers in the U.S. -- Ford (NYSE:F), General Motors (NYSE:GM), and Jeep-owner Stellantis (NYSE:STLA) -- all advanced on Wednesday.
Analysts have flagged that the duties pose a particular threat to these companies because their supply chains are often spread across a number of plants in North America.
With the tariffs in place, the American car industry could face short-term headwinds of up to $110 million per day, analysts at Bernstein have estimated, adding that the full-year impact would be as much as $40 billion should trade flows remain unchanged.
Trump administration officials said they would be open to discussing other products that could be given a reprieve from the tariffs, although the president has said such exceptions do not mean that he was stepping back from his trade conflict with Canada and Mexico. Trump has said the tariffs are in response to both countries, as well as China, not doing enough to help halt the flow of migrants and illegal drugs into the U.S.
3. Marvell earnings
Shares in Marvell (NASDAQ:MRVL) slumped by more than 14% in extended hours trading on Thursday after the chipmaker’s quarterly results failed to excite investors hoping for strong artificial intelligence-driven growth.
The company, which manufactures custom AI chips for major cloud providers that help large language models quickly process reams of information, has been boosted by supply constraints at industry-leader Nvidia (NASDAQ:NVDA). The backlog has forced some mega-cap technology firms like Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN) to look beyond Nvidia -- and at alternatives like Marvell and peer Broadcom (NASDAQ:AVGO) -- for their chips.
Earnings per share in the fourth quarter came in at $0.60 on revenue of $1.82 billion, compared with analysts’ projections of $0.59 and $1.8 billion, respectively. Revenue at its key data center division jumped by 78% from a year earlier to $1.37 billion.
For its first quarter, per-share income was guided in a range of $0.56 to $0.66 on revenue of $1.875 billion, plus or minus 5%. Estimates had called for an outlook of $0.6 and $1.87 billion.
"There’s really nothing ‘bad’ in the release, although obviously ‘inline’ isn’t good enough for this type of a name, especially after the company beat by a much larger margin back in December," analysts at Vital Knowledge said in a note to clients.
4. ECB decision ahead
The European Central Bank is widely expected to slash interest rates yet again on Thursday, although the outlook for reductions beyond the meeting remains deeply uncertain.
Markets are betting officials will lower the ECB’s key rate by 25 basis points to 2.50%. But, along with relatively tepid Eurozone activity and cooling inflationary pressures, policymakers at the ECB face several developments that could impact the Eurozone currency bloc’s economy.
Potential U.S. tariffs on European Union goods loom large, while coalition talks in the region’s traditional economic powerhouse, Germany, are ongoing.
Amidst all of this, recent actions and statements from the Trump administration regarding a possible Ukraine ceasefire have threatened to upend Europe’s defense strategy, especially its longstanding reliance on Washington to provide a security backstop. Analysts have begun to ponder if European leaders may need to increase defense spending, potentially shaking up the priorities of several government budgets.
The ECB gathering will see the last "easy cut" for the central bank, analysts at BofA argued, adding that "disagreements" over future reductions this year could grow.
"The [...] meeting could be noisy for markets. Internal disagreement over whether to drop the reference to rates being restrictive may emerge," the analysts said.
5. Oil prices tick up
Oil prices rose on Thursday, bouncing from multi-year lows as traders fretted over a possibly escalating trade war and increasing global supplies.
Brent plunged 6.5% in the previous four sessions, dropping to its lowest since December 2021 on Wednesday, while West Texas Intermediate crude oil fell 5.8% over the same period to its lowest since May 2023.
Elsewhere, Bitcoin advanced, extending a rebound from recent losses amid heightened speculation over Trump’s plans for a strategic crypto reserve before a White House summit this week.