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On Monday, global stock markets took a hit, with Wall Street bracing for further downturn. This followed investor unease over the US economy, which last week caused the S&P 500 to experience its steepest weekly loss in half a year.
S&P futures dropped by over 1% after enduring a 3.1% decline in the previous week. The Nasdaq 100, shaken by recent sell-offs in major tech stocks, seemed poised for a similar slump as trading began on Monday.
These latest setbacks, affecting markets across Europe and Asia too, came in the wake of US President Donald Trump’s remarks. On Sunday, he neither confirmed nor denied the possibility of a recession or inflation jump while brushing off business concerns about his unclear tariff strategies.
Paul Donovan, chief economist at UBS Global Wealth Management, commented, “Trump’s tariff policy is so unpredictable, with reversals happening so quickly, that they’re nearly overlapping with new tax hike announcements. It’s a threat to global growth and trade.”
In Europe, which has been performing better than the US this year, the Stoxx Europe 600 index slid by 0.6%, weighed down by banking and tech shares. Germany’s Dax, which hit a series of record highs the week before following an unprecedented spending package, dropped by over 1%.
Investors are worried that Trump’s erratic trade war could be damaging the US economy. Friday’s underwhelming jobs data was just another piece of evidence in a series of weak economic metrics.
Seeking safer investments, investors turned to US Treasuries on Monday. Consequently, the yield on the 10-year Treasury note—which moves inversely to prices—dropped by 0.06 percentage points to 4.26%.
