U.S. stock futures tumbled sharply on Monday as Wall Street anxiously awaited President Trump’s highly anticipated tariff announcements, set to take effect on April 2 under the banner of “Liberation Day.”
The Nasdaq 100 futures fell nearly 1.6%, while S&P 500 futures dropped 1.1% and Dow futures slid 0.7% (equivalent to ~270 points), extending March’s brutal sell-off.
The Trump administration’s plan to impose a 25% tariff on non-U.S.-made cars and reciprocal duties on “all countries” has sparked fears of retaliatory trade wars. Reports suggest Trump urged advisors to adopt a more aggressive stance, heightening concerns about global economic fallout.
Analysts warn the policies could compound inflationary pressures, limiting the Federal Reserve’s ability to cut interest rates despite rising recession risks.
Goldman Sachs raised its U.S. recession probability to 35% (up from 20%) and slashed its S&P 500 targets to 5,300 in three months and 5,900 in a year.
JPMorgan’s Bruce Kasman echoed the caution, citing a 40% recession risk tied to potential damage to business and consumer confidence. The Fed’s preferred inflation gauge, core PCE, recently surprised to the upside, complicating monetary policy decisions.
Tech giants like NVIDIA and Tesla fell 3% and 4.3% in premarket trading, respectively, as investors rotated into defensive assets. Gold surged to a record high above $3,100 for the third consecutive day, while the CBOE Volatility Index spiked to its highest level in two weeks.
International markets also retreated, reflecting global unease over trade tensions.
Investors are bracing for Friday’s March employment data, which could offer clues about labor market resilience amid tariff headwinds.
Goldman Sachs now forecasts three Fed rate cuts in 2025 (up from two) to counter recession risks.
March is shaping up to be the worst month for equities since 2022, with the S&P 500 down 6.3%, the Dow 5.2%, and the Nasdaq 8.1%.
Analysts warn April could bring prolonged volatility as markets await clarity on tariff enforcement and delayed negotiations post-April 2.
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