US stock futures choppy after China retaliates with tariffs; bank earnings awaited

(Reuters) -U.S. stock index futures swung between gains and losses on Friday after China increased its tariffs on U.S. imports to 125% in the latest escalation of the ongoing trade war, with markets keenly awaiting bank earnings later in the day.

China's move comes after U.S. President Donald Trump on Thursday ramped up pressure on the country by lifting tariffs to an effective rate of 145%, even as he announced a 90-day tariff reprieve on most trading partners.

Stocks have been on a roller-coaster ride in response to tariff announcements in the past few days. Wall Street fell for four straight sessions, before bouncing back on Wednesday with the S&P 500 seeing its largest one-day percentage jump since October 2008.

Stocks, however, slumped again on Thursday and were more than 7% off from levels seen before last week, when Trump's "reciprocal" tariffs sparked the market rout.

"The significant tariffs on China will cause economic disruption if they remain in place ... while downside risks do remain, we believe the risk of a more severe economic downturn is now more limited," Mark Haefele, chief investment officer at UBS Global Wealth Management said.

Later in the day, big banks such as JPMorgan Chase, Morgan Stanley, Wells Fargo and asset manager BlackRock are scheduled to report results before markets open.

Investors focus will likely shift from profits to bank bosses' remarks on the economy amid worries that Trump's tariffs could hamper global growth and stoke inflation.

At 05:52 a.m. ET, Dow E-minis were up 78 points, or 0.2%, S&P 500 E-minis were up 18.5 points, or 0.35%, and Nasdaq 100 E-minis were up 81.5 points, or 0.44%.

Most megacap and growth stocks edged higher after initial losses in premarket trade, with Apple, Nvidia and Amazon.com all marginally higher.

Investors fled to traditional safe-haven assets such as gold, which jumped to a record high. Safe-haven currencies such as the Japanese yen and Swiss franc also strengthened against the dollar.

The rally in the precious metal lifted gold miners, with Newmont and U.S.-listed shares of Barrick Gold rising 3.5% and 2.8%, respectively.

Treasury yields remained elevated after a steep bond selloff earlier this week. The yield on the 10-year note was at 4.38%, hovering near its February highs.

At least three Fed officials, including New York Fed President John Williams, are scheduled to speak throughout the day.

Traders currently expect more than 90 basis points of interest rate cuts by the Federal Reserve this year, starting in June, according to LSEG data.

(Reporting by Shashwat Chauhan and Purvi Agarwal in Bengaluru; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta)