Stocks Drop as Fed’s Inflation Assurances Wear Off – Europe Market Wrap

US market futures dipped, reversing previous gains, as concerns grew about the Fed’s capacity to drastically lower interest rates this year in the face of potentially inflationary trade tariffs.

Contracts for the S&P 500 and Nasdaq 100 fell at least 0.8%, a day after Wall Street rose on the Fed’s warning that it still sees room to loosen policy and believes excessive price inflation is temporary. Europe’s Stoxx 600 index dipped 1%, snapping a four-day gain streak.

US markets have recovered slightly from a traumatic four-week period in which the S&P 500 fell into a correction. However, concerns linger that Trump would continue to raise trade taxes, stifling economic development and fuelling inflation. Sentiment was influenced by ECB’s Lagarde’s statement Thursday that US tariffs have increased uncertainties about the economic outlook.

The Pound fell nearly 0.5% after rising earlier this week to its highest level since November. The BoE is anticipated to keep its benchmark rate unchanged later in the day, citing the latest data indicating that UK pay growth remained at its highest level in nine months and employment increased.

Copper prices rose beyond $10,000 per tonne with the fear of increased tariffs.