Stocks fell on Monday, with U.S. futures pointing lower, as concerns over China’s deflationary pressures and an escalating trade war added to worries about a slowing U.S. economy.
U.S. S&P 500 stock futures dropped 0.5%, while Nasdaq futures fell by 0.6% at 0137 GMT. In Asia, Hong Kong’s Hang Seng Index eased 0.1%, alongside a similar decline in mainland Chinese blue-chip stocks. Taiwan’s benchmark index slipped by 0.4%, although Japan’s Nikkei gained 0.2%, flipping between small gains and losses throughout the day.
The Yen and Swiss Franc Strengthen
The yen strengthened by around 0.6%, reaching 147.245 per dollar, while the Swiss franc also rose 0.4%, reaching 0.8773 per dollar. These gains were driven by investors seeking safe-haven assets amid growing concerns about global economic growth.
China’s Economic Slowdown Adds Pressure
Recent data from China showed a sharp decline in the country’s consumer price index (CPI) in February, marking the steepest drop in 13 months. At the same time, the producer price index (PPI) continued its deflationary trend, falling for the 30th consecutive month. This highlights the ongoing economic challenges in China.
In response, Beijing has pledged additional stimulus measures to boost domestic consumption and foster innovation, particularly in artificial intelligence. These moves were announced at the beginning of China’s week-long National People’s Congress, which will run until Tuesday.
U.S. President Trump Avoids Predictions on Economic Impact of Tariffs
On the international front, U.S. President Donald Trump, in a Fox News interview on Sunday, refrained from commenting on whether his tariffs on China, Canada, and Mexico would result in a U.S. recession.
In the U.S., economic data continued to show signs of softening. February’s job report revealed that the labor market created fewer jobs than expected, marking the first payrolls report since Trump’s policy changes took effect.
Kyle Rodda, senior financial markets analyst at Capital.com, noted, “I think it’s Trump’s cavalier approach to economic policy that’s rattling sentiment.” He added that unlike in his first term, where policy pivots were made in response to signs of economic slowdown, Trump now appears focused on making significant structural changes to the economy, even if they come at the expense of short-term growth.
U.S. Treasury Yields and the Dollar Slip
As concerns over economic growth mount, U.S. Treasury yields continued to slide. The 10-year yield fell by as much as 6 basis points to 4.257%, while the two-year yield dropped 4.5 basis points to 3.956%.
The U.S. dollar index, which measures the dollar against six major currencies, eased by 0.1% to 103.59. Meanwhile, the euro gained 0.3% to $1.0866, and the British pound rose 0.2% to $1.2946.
Trump’s Tariff Warnings Impact Global Markets
President Trump’s trade policies remain a key concern for global markets. On Friday, he warned Canada that reciprocal tariffs on dairy and lumber could be imminent. Additionally, Trump hinted at the possibility of imposing sanctions on Russian banks and tariffs on Russian products to expedite an end to the war in Ukraine. These comments have contributed to uncertainty in the oil markets, with Brent crude falling by 0.4% to $70.11 per barrel, while U.S. West Texas Intermediate (WTI) crude also saw a similar decline to $66.76 per barrel.
Safe-Haven Assets See Mixed Performance
Gold, traditionally a safe-haven asset, gained 0.15%, reaching $2,915 per ounce, as investors sought stability amid the market turmoil.
Meanwhile, cryptocurrency bitcoin saw a sharp decline, falling as much as 7.2% from Friday’s close, reaching its lowest point of the month at $80,085.42. Despite optimism earlier this year over looser regulation and the creation of a cryptocurrency reserve under Trump, bitcoin has struggled in recent weeks. The long-awaited executive order issued on Friday, which proposed the creation of a cryptocurrency reserve, disappointed many investors by stating there would be no additional purchases of bitcoin.
Related topics:
