Global stock markets fell on Monday as investors worried about the health of the US economy and the volatile impact of tariffs on businesses.
The S&P 500 futures fell 1.5% in pre-market trading, suggesting that the sharpest losses in months will be officially extended once the US market is officially opened.
Stocks in Europe and Asia also fell. Last week, the index tracking the largest public companies in the eurozone, which hit record highs, fell 1.2%. Hong Kong's Hangsen index fell by more than 1.8%.
Investors seeking Havens continued to choose the relative security of their bonds, pushing the 10-year U.S. Treasury yield to 4.23%. (The bond price will be moved in reverse to yield.)
In an interview with Fox News that aired Sunday, President Trump refused to rule out the possibility that his policies could cause a recession.
Over the past few weeks, Trump has threatened, imposed, suspended and resumed tariffs on America's biggest trading partners, Canada, Mexico and China. A dizzy shift, including last-minute exemptions for some automakers and energy products, has led to increased uncertainty and has left investors uneasy.
Economists have become pessimistic about the outlook to grasp Trump's approach to tariffs that have companies looking to plan new investments and jobs. Reducing the freezing of federal workforce and government spending is also undermining consumer sentiment.
Analysts at JPMorgan Chase said in the report that there is a “substantially high risk” of a global recession this year due to “the extreme US policies.” They have made the chance of such a slump 40%. A Goldman Sachs strategist raised the possibility of a US recession next year to 20%, saying “policy change is a significant risk.”
On Monday, China's retaliatory tariffs were enforced on US agricultural products. On Wednesday, the Trump administration is expected to introduce a 25% tariff on all steel and aluminum imports. Trump also threatened to impose “mutual tariffs” next month on all US imports to align the tariffs and trading policies of other countries.
Stocks in US tech companies continued to lead the decline, falling nearly 2% in pre-market trading on Monday. Tesla stocks fell by more than 3%, Nvidia fell by 2.5%, while both Amazon and Alphabet fell by about 2%.
