Wall Street futures took a nosedive early Monday as concerns over deflationary pressures in China and a weakening U.S. economy exacerbated fears of an escalating global trade war. As of 0137 GMT, S&P 500 futures were down 0.5%, while Nasdaq futures had sunk 0.6%.
Asian markets reflected this sentiment, with Hong Kong’s Hang Seng Index and mainland China’s blue chips both easing by 0.1%. Taiwan’s equity benchmark saw a 0.4% decline, though Japan’s Nikkei managed a slight increase of 0.2% after fluctuating through the session.
The safe-haven yen and Swiss franc strengthened in response to these market jitters, with the yen rising 0.6% to reach 147.245 per dollar and the franc gaining 0.4% to 0.8773 per dollar.
Recent data revealed that China’s consumer price index fell at its sharpest rate in 13 months in February, and producer price deflation extended to a 30th consecutive month. In response, Beijing pledged to introduce more stimulus measures aimed at boosting consumption and fostering innovation, especially in artificial intelligence, during the ongoing National People’s Congress meetings.
U.S. President Donald Trump, in a Fox News interview, refrained from predicting whether his tariffs on China, Canada, and Mexico could lead to a recession in the U.S. The ongoing trend of soft economic data continued, highlighted by a recent labor report showing fewer jobs were created than expected, casting a shadow over Trump’s economic policies.
Kyle Rodda, a senior financial markets analyst at Capital.com, commented, “Trump’s cavalier approach to economic policy is rattling sentiment,” emphasizing a shift towards structural changes that may come at the cost of immediate growth.
U.S. Treasury yields also saw a decline, with the 10-year yield dropping by 6 basis points to 4.257%, while the two-year yield dipped 4.5 basis points to 3.956%. The U.S. dollar index fell 0.1% to 103.59, while both the euro and sterling gained ground.
As geopolitical tensions rise, including Trump’s warning to Canada regarding potential tariffs on dairy and lumber, crude oil prices felt the impact, with Brent crude down 0.4% at $70.11 a barrel and U.S. West Texas Intermediate following suit at $66.76 a barrel. Meanwhile, gold, a traditional safe haven, saw a slight increase of 0.15% to $2,915 an ounce.
In the cryptocurrency market, Bitcoin faced significant losses, plummeting 7.2% to reach a monthly low of $80,085.42. This decline came after an executive order related to a proposed cryptocurrency reserve failed to meet investor expectations, leading to disappointment about the lack of additional Bitcoin purchases.
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