U.S. stock index futures fell on Thursday evening following a sharp drop on Wall Street as a rapidly escalating trade war with China offset relief over President Donald Trump postponing plans for global tariffs. 

Futures turned negative after reversing early gains, as investors remained on edge over worsening trade relations between the U.S. and China, and the implications this would have on the global economy. The White House also clarified that China now faces 145% U.S. tariffs, which could invite more retaliation from Beijing.

S&P 500 Futures fell 0.7% to 5,265.0 points, while Nasdaq 100 Futures fell 0.9% to 18,304.50 points by 20:02  ET (00:02 GMT). Dow Jones Futures fell 0.7% to 39,520.0 points. 

Markets largely looked past data showing a bigger-than-expected fall in consumer price index inflation in March, given that core CPI still remained sticky. 

Wall St slides as US-China trade war ramps up

Futures fell after a negative session on Wall Street, as concerns over a U.S.-China trade war offset relief from Trump announcing a 90-day extension for his plans to impose reciprocal tariffs.

Trump hiked tariffs against China sharply this week, drawing ire and retaliation from Beijing, which struck back with 84% tariffs on U.S. goods. Chinese officials also vowed to “fight to the end” in what appeared to be a rapidly escalating trade war between the world’s biggest economies. 

Trump also maintained a harsh rhetoric against China, pointing to few chances that a trade deal will be struck soon.

Investors fretted over the economic impact of tariffs on China, given that the U.S. still imports several key materials from the country, which are not easily replaceable. China is also a key market and manufacturing hub for several major U.S. firms, especially Wall Street heavyweight Apple (NASDAQ:AAPL), which slid 4.2% on Thursday. 

This factored into steep losses on Wall Street, with the S&P 500 falling 3.5% to 5,268.05 points. The NASDAQ Composite slid 4.3% to 16,387.31 points, while the Dow Jones Industrial Average fell 2.5% to 16,387.31 points.

Still, all three indexes were headed for their first positive week in three, and were trading up between 3% and 5.2% so far this week. A bulk of these gains were clocked on Wednesday, after Trump postponed his plans for reciprocal tariffs. 

Q1 earnings due amid heightened economic uncertainty

Investors were now bracing for the first-quarter earnings season, which begins on Friday with prints from several major banks. JPMorgan Chase & Co (NYSE:JPM), Wells Fargo & Company (NYSE:WFC), Morgan Stanley (NYSE:MS), Bank of New York Mellon (NYSE:BK), and private equity giant BlackRock Inc (NYSE:BLK) will report Q1 earnings on Friday. 

Goldman Sachs Group Inc (NYSE:GS) will report earnings on Monday. 

Earnings bring another layer of uncertainty to already volatile markets, with focus squarely on whether corporate earnings deteriorated amid heightened economic turmoil in the first quarter of Trump’s second term.