US Stock Futures Drop as Fears Mount for Economy: Markets Wrap

(Bloomberg) — Wall Street stock futures dropped and Treasuries ticked higher as President Donald Trump’s protectionist policies and cuts to the federal workforce dented confidence in US economic outperformance.

Contracts for the S&P 500 declined 1%, following the worst week for the benchmark index since September, while those on the Nasdaq 100 lost 1.1%. Shares in Tesla Inc. fell about 3% in premarket trading on Monday, inching toward erasing their post-election gains, and most other Big Tech names also dropped, including AI bellwether Nvidia Corp. European stocks slipped 0.4%.

Mounting unease over the potential fallout from trade tariffs and sweeping government job cuts sent 10-year Treasury yields five basis points lower. The key borrowing rate has dropped more than 20 basis points in the past month, signaling risks that the world’s biggest economy will stall. Bloomberg’s dollar index held just shy of four-month lows.

Tariffs and Trump’s policies have started having their “fair share of pressures on the equity markets, plus we have now started seeing a lot of concerns around US growth,” Sanford C. Bernstein strategist Rupal Agarwal said on Bloomberg TV.

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Trump said at the weekend the US economy faces “a period of transition,” while Treasury Secretary Scott Bessent earlier warned of disruption to growth. Bessent also ruled out policy shifts to prop up the stock market, the so-called “Trump Put.”

Meanwhile, more analysts are warning of a hit to corporate earnings from tariffs and fiscal spending cuts. Morgan Stanley strategist Michael Wilson said the S&P 500 could slide 5% in the first half of the year, though he expects a recovery by year-end. JPMorgan Chase & Co. analysts also said they are turning cautious on risk assets.

Among other premarket stock movers, cryptocurrency-exposed names fell as Bitcoin extended losses for a fifth consecutive session. Coinbase Inc. lost ground after S&P Dow Jones Indices left out the crypto exchange operator from the S&P 500 benchmark, though food delivery firm DoorDash Inc. jumped as it was included in the gauge.

Earlier, Chinese shares listed in Hong Kong slipped as consumer inflation fell below zero for the first time in 13 months, compounding the dour outlook for the world’s second-biggest economy. 

Key events this week:

• Australia consumer confidence, Tuesday
• Japan GDP, household spending, money stock, Tuesday
• US job openings, Tuesday
• Canada rate decision, Wednesday
• Japan PPI, Wednesday
• US CPI, Wednesday
• Eurozone industrial production, Thursday
• US PPI, initial jobless claims, Thursday
• France CPI, Friday
• Germany CPI, Friday
• UK industrial production, Friday
• US University of Michigan consumer sentiment, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 fell 0.4% as of 9:54 a.m. London time
• S&P 500 futures fell 1%
• Nasdaq 100 futures fell 1.2%
• Futures on the Dow Jones Industrial Average fell 0.8%
• The MSCI Asia Pacific Index fell 0.7%
• The MSCI Emerging Markets Index fell 1.1%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro rose 0.2% to $1.0852
• The Japanese yen rose 0.5% to 147.26 per dollar
• The offshore yuan fell 0.2% to 7.2620 per dollar
• The British pound was little changed at $1.2908

Cryptocurrencies

• Bitcoin fell 0.8% to $82,412.4
• Ether rose 2.8% to $2,104.53

Bonds

• The yield on 10-year Treasuries declined five basis points to 4.26%
• Germany’s 10-year yield declined two basis points to 2.82%
• Britain’s 10-year yield was little changed at 4.64%

Commodities

• Brent crude rose 0.3% to $70.58 a barrel
• Spot gold rose 0.2% to $2,913.99 an ounce

This story was produced with the assistance of Bloomberg Automation.

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