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US Steel up after report of active Nippon Steel ( NISTF ) merger talks

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Lululemon shares slide after bleak annual outlook

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February PCE data due at 8:30 a.m. ET

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Futures off: Dow 0.13%, S&P 500 0.18%, Nasdaq 0.34%

(Updates with analyst quote)

By Pranav Kashyap and Johann M Cherian

March 28 (Reuters) - U.S. stock index futures were under pressure on Friday as investors grappled with the prospect of more tariffs from President Donald Trump and kept a close eye on a pivotal inflation report due later in the day.

Trump's decision to forge ahead with a 25% tariff on auto imports - set to take effect next week - sent shockwaves through global markets, inciting backlash from lawmakers and industry leaders worldwide.

Auto stocks bore the brunt of the selloff in the previous session. In premarket activity, General Motors ( GM ) dipped 0.6% following a 7% decline, while Ford inched up 0.4% after a 3.9% drop.

Attention is now firmly on a fresh round of tariffs the U.S. plans to unveil on April 2. Trump hinted that these measures might not be the straightforward tit-for-tat levies he has previously vowed to impose.

At 8:30 a.m. ET, investors will scrutinize the U.S. Personal Consumption Expenditure data, the Federal Reserve's favored indicator for inflation. February's numbers are anticipated to reveal a rebound in consumer spending and a rise in annual core PCE prices to 2.7%.

Traders expect the central bank to lower borrowing costs by 25 basis points for the first time this year in July, according to data compiled by LSEG.

"The Fed will have a difficult job to do in setting monetary policy in the months to come," said Charalampos Pissouros, senior market analyst at brokerage XM.

"Although consumer and producer inflation data for the month revealed some cooling, the components that are also included in the PCE calculation, accelerated in March. Therefore, this poses some upside risks to today's prints."

At 7:13 a.m. ET, Dow E-minis were down 52 points, or 0.13%, S&P 500 E-minis were down 10.25 points, or 0.18% and Nasdaq 100 E-minis were down 67 points, or 0.34%.

Economic uncertainty as a consequence of tariffs have also forced companies to lower their annual forecasts, with Lululemon Athletica ( LULU ) being the latest to do so. Shares of the sportswear maker slid 12.5%.

Gold prices scaled yet another peak due to ongoing uncertainty on the tariff front, sending miners of the yellow metal such as Harmony Gold and Gold Fields up about 3% each.

The escalation of the global trade war, initiated by Trump upon his return to the White House, has rattled markets.

Investors have dialed back their exposure to U.S. equities, driving both the S&P 500 and the Nasdaq down by 10% from their recent record highs, thus entering technical correction territory earlier in the month.

Both indexes have managed to claw back over 3% from their March lows as investors seek to establish a market floor.

Still, the indexes were poised to wrap up the first quarter of 2025 in negative territory. The S&P 500 is facing its first quarterly setback in six quarters, while the tech-laden Nasdaq braces for its most significant quarterly dip in nearly two years.

Investors will also parse through speeches by Federal Reserve policymakers Michael Barr and Raphael Bostic later in the day.

U.S. Steel rose 5.7% after a report said Nippon Steel ( NISTF ) and the company are in active talks about a deal that would preserve their $14 billion merger. (Reporting by Pranav Kashyap and Johann M Cherian in Bangalore; Editing by Maju Samuel)