U.S. stock index futures declined on Sunday evening amid heightened risk aversion, driven by the impending April 2 deadline set by President Donald Trump for the imposition of additional trade tariffs, alongside ongoing worries regarding decelerating economic growth. Futures continued to decline following a disappointing session on Friday, as investors reacted to inflation figures that exceeded expectations. This development raises concerns about potential pressures on the U.S. economy and suggests that interest rates may remain elevated over the long term.
Market sentiment was further unsettled by a weekend report indicating that Trump intends to pursue more extensive tariffs, while Goldman Sachs has revised its outlook to reflect an increased probability of a U.S. recession. S&P 500 Futures declined by 0.7%, settling at 5,585.75 points, whereas Nasdaq 100 Futures experienced a 1.2% decrease, reaching 19,217.50 points as of 20:05 ET (00:05 GMT). Futures for the Dow Jones declined by 0.4%, settling at 41,693.0 points.
Concerns regarding tariffs imposed by Trump intensify as the date of ‘liberation day’ draws near. Trump is poised to announce additional trade tariffs on April 2, a date he has consistently referred to as “liberation day.” A report released over the weekend indicated that Trump is contemplating the imposition of higher tariffs on a wider array of countries, as he initiates a trade agenda designed to address purported trade imbalances affecting the U.S. Last week, the U.S. president caused significant volatility in the markets by implementing a 25% tariff on all foreign automobiles. The tariff is set to be implemented on April 2, at which point Trump may also reveal tariffs targeting additional sectors, including commodities, semiconductors, and pharmaceuticals.
Concerns are mounting in the markets that the tariffs imposed by Trump, which will ultimately be absorbed by U.S. importers, may contribute to inflationary pressures and hinder economic growth in the United States in the near future. Goldman Sachs estimates a 35% probability of a recession occurring within the next year, while also projecting that inflation will exceed the Federal Reserve’s 2% target in 2025.
Wall Street experiences a downturn amid concerns over trade and inflation; the technology sector faces significant pressure due to uncertainties surrounding artificial intelligence. On Friday, Wall Street indexes experienced a significant decline following the release of the PCE price index inflation data, which surpassed expectations for February, marking the Federal Reserve’s favored measure of inflation. The reading provides the Federal Reserve with additional motivation to maintain interest rates at their current levels for an extended period, particularly amid increased uncertainty regarding the economic landscape.
Concerns regarding inflation were exacerbated by apprehensions surrounding Trump’s tariffs. Moreover, declines in significant technology equities, including the semiconductor giant NVIDIA Corporation (NASDAQ:NVDA), exerted additional pressure on Wall Street. The stock, along with several prominent technology counterparts, experienced a decline following reports indicating a deceleration in investment in artificial intelligence data centers. This sector, which had previously been a significant driver of demand over the past two years, now seems to be facing saturation.
On Friday, the S&P 500 experienced a decline of nearly 2%, closing at 5,580.94 points, while the NASDAQ Composite fell by 2.7%, ending the day at 17,322.99 points. The Dow Jones Industrial Average experienced a decline of 1.7%, closing at 41,683.90 points.