Global Equities Retreat as Markets Brace for Key Data & Trade Risks

Major U.S. equity indices reversed early gains and closed lower on Thursday, as caution set in ahead of the key U.S. jobs report and investors digested the Federal Reserve’s latest policy stance. The S&P 500 fell more than 1% to 6,335.40, while the Dow Jones Industrial Average declined 1%, and the Nasdaq tumbled nearly 2% to 23,160, weighed by tech losses.

European markets also retreated, with Germany’s DAX losing 0.8%, the EuroStoxx 50 slipping close to 2%, and the FTSE 100 ending modestly lower, snapping an eight-session winning streak.

Much of the pressure came from broad-based profit-taking, as traders moved to reduce exposure before Friday’s U.S. labor report.

Risk Appetite Fades as Fed Signals Patience

The market pullback followed the Federal Reserve’s July policy meeting, where the central bank held interest rates steady and offered no clear signal of a rate cut in September. The Fed maintained a data-dependent stance, emphasizing its continued monitoring of inflation trends and upcoming labor market indicators.

According to the CME FedWatch Tool, market participants are now largely pricing out the likelihood of a September cut, shifting expectations further into year-end.

Attention now turns to the U.S. Non-Farm Payrolls report due on Friday, which will provide fresh insight into the labor market. A strong report could make the Fed stay cautious, while a weaker reading might raise hopes for rate cuts later this year.

Trump’s New Tariff Structure Sparks Trade Worries

Adding to market uncertainty, U.S. President Donald Trump announced major changes to U.S. tariff policy under his revised trade framework. The new plan includes a 10% baseline tariff on all imports, along with higher tariffs of up to 41% on countries that do not have a trade agreement with the U.S.

India faces a 25% tariff, while Canada was hit with a 35% duty, raising fresh concerns over rising trade tensions and potential supply chain disruptions.

“Markets are staying on guard as this could lead to further tariff escalation, despite recent optimism around trade talks with Japan and the EU,” said Shawn Lee, Ultima Market Analyst.

“Equities are likely seeing profit-taking due to uncertainty around tariffs and the U.S. jobs report today,” Shawn added.

SP500 Index, Day Chart | Source: Ultima Market

The S&P 500 Index recorded its biggest one-day loss in two months on Thursday. While the decline does not yet signal a major shift in investor sentiment, it highlights that markets remain cautious amid uncertainty over trade policy and upcoming economic data.

What to Watch Next

• U.S. Labor Report: Key data on non-farm payrolls and wages could influence expectations for the Fed’s next move on interest rates.
• Big Tech Earnings: Apple and Amazon are set to report results later today. Their performance may either support or challenge the recent AI-driven market optimism.
• Copper and Trade Policy: Further developments in tariff policy—especially involving copper and industrial imports— could affect market sentiment in the near term.

Overall, how markets move today—particularly in global equities—will likely set the market tone going forward. The outcome of the U.S. jobs report and the trade development may determine whether stocks enter a near-term correction or continue their upward momentum-driven rally.

Disclaimer

Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.