U.S. stock futures slipped Thursday as investors digested a new wave of tariffs announced by President Donald Trump. Brazil has become the latest target of Trump’s trade measures, with the president criticizing the country over its handling of a political ally. Meanwhile, minutes from the Federal Reserve’s recent meeting indicate some policymakers see potential for interest rate cuts later this year. Additionally, shares of WK Kellogg (NYSE:KLG) jumped in after-hours trading amid reports that Ferrero is close to acquiring the cereal maker.
Futures Move Lower
Following Trump’s threat to impose higher tariffs on Brazil, U.S. futures dropped on Thursday, signaling fresh tensions in the ongoing trade disputes.
By 03:42 ET, Dow futures were down 125 points (0.3%), S&P 500 futures slipped 15 points (0.2%), and Nasdaq 100 futures declined 47 points (0.2%).
The major indices had gained ground in the previous session, lifted by Federal Reserve minutes that fueled hopes of interest rate cuts later this year.
Tech giant Nvidia (NASDAQ:NVDA) led gains with a 1.8% rise, briefly becoming the first company ever to reach a $4 trillion market valuation during trading. This surge helped push the Nasdaq Composite to a record closing high.
Analysts from Vital Knowledge explained, “[T]he big driver of the recent advance is a belief that tariffs will either be watered down from the current threat levels and/or have only a benign effect on inflation while other categories of the economy […] cause prices in aggregate to move in a disinflationary direction, opening the door for the Fed to resume policy easing.”
Trump Targets Brazil with 50% Tariffs
Despite these market gains, ongoing trade conflicts have kept some investors cautious about the economy’s path.
In his latest announcement, Trump declared plans to impose a 50% tariff on all imports from Brazil, effective August 1. This move partly responds to his frustration over Brazil’s treatment of former president Jair Bolsonaro, an ally of Trump’s who faces trial for allegedly attempting a coup.
In a letter addressed to Brazil’s current president Luiz Inácio Lula da Silva, Trump called Bolsonaro’s treatment “an international disgrace.”
These 50% tariffs represent the highest rates among a series of tariff letters Trump issued this week, following a delay of the reciprocal duties deadline to August 1 from an earlier planned date of Wednesday.
Analysts have suggested that political motives likely underlie the decision more than trade disputes, noting Brazil is the U.S.’s 15th-largest trading partner and a rare net importer of American goods.
Trump also reaffirmed plans to impose a 50% tariff on imported copper, citing a national security report emphasizing the metal’s importance.
Federal Reserve Minutes Draw Attention
Trump’s tariffs continue to contribute to broad uncertainty, impacting consumer confidence and complicating investment decisions.
The Federal Reserve has identified tariffs as a key factor in its cautious approach to future rate cuts, with concerns that tariffs could increase inflation and slow growth.
Minutes from the June Fed meeting revealed that only “a couple” of policymakers were ready to consider lowering borrowing costs as soon as this month. This contrasts with Trump’s frequent calls for faster rate cuts and his criticism of Fed Chair Jerome Powell, whom he has even urged to resign.
Nonetheless, Powell has maintained a cautious tone while leaving the door open for rate reductions this year. According to the minutes, “most participants” believed that easing monetary policy would be appropriate later in 2025, with tariff-induced price shocks expected to be “temporary or modest.”
WK Kellogg Shares Surge on Ferrero Acquisition Report
Shares of WK Kellogg (NYSE:KLG) jumped sharply in extended trading following a Wall Street Journal report that Italian family-owned confectioner Ferrero is nearing a roughly $3 billion deal to acquire the cereal maker.
Citing sources familiar with the talks, the WSJ reported Ferrero—known for brands like Ferrero Rocher and Nutella—could finalize the acquisition as early as this week if negotiations proceed smoothly.
The deal would combine Ferrero with WK Kellogg, the well-known producer of cereals like Froot Loops and Rice Krispies, staples in supermarkets.
Ferrero has been actively seeking acquisitions in the U.S. as part of its international growth strategy, having previously acquired Blue Bunny-maker Wells Enterprises and Nestlé’s U.S. chocolate business.
WK Kellogg itself emerged about two years ago when Kellogg spun off its North American cereal segment and now faces changing consumer habits amid inflation and growing health awareness.
TSMC Reports Strong Sales Beat
Taiwan Semiconductor Manufacturing Co (TSMC) posted a 39% increase in second-quarter sales on Thursday, beating forecasts thanks to strong global demand for AI chips.
The company reported NT$933.8 billion ($31.9 billion) in sales for April-June, exceeding estimates of NT$927.83 billion and its own previous guidance of $28.4 billion to $29.2 billion.
TSMC’s robust revenue highlights the growing appetite worldwide for advanced semiconductors, especially those designed for artificial intelligence workloads.
As the world’s largest contract chipmaker, TSMC counts major customers including Nvidia and Apple (NASDAQ:AAPL).
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