Wall Street futures dropped early Monday, with the safe-haven yen and Swiss franc strengthening as concerns over a fading US economy, deflationary pressures in China, and an escalating global trade war fueled investor anxiety.
As of 0137 GMT, US S&P 500 futures fell 0.5%, while Nasdaq futures were down 0.6%. Asian markets also saw losses, with Hong Kong’s Hang Seng Index and China’s blue-chip index both slipping 0.1%. Taiwan’s equity benchmark declined 0.4%, while Japan’s Nikkei managed a small gain of 0.2% after fluctuating between slight gains and losses.
The yen rose 0.6% to 147.245 per dollar, and the Swiss franc strengthened 0.4%, reaching 0.8773 per dollar, reflecting the growing demand for safe-haven currencies amid economic uncertainties.
Data released Sunday showed China’s consumer price index fell at the fastest rate in 13 months in February, while producer price deflation extended for a 30th consecutive month. In response, Beijing pledged further stimulus measures aimed at boosting consumption and fostering innovation, particularly in artificial intelligence, as the National People’s Congress convened this week.
Meanwhile, US President Donald Trump, in an interview on Fox News Sunday, refrained from predicting whether his tariffs on China, Canada, and Mexico would lead to a US recession. A string of weak US economic data continued, with February’s labor market figures showing fewer job additions than expected, marking the first payroll report influenced by Trump’s policies.
Kyle Rodda, senior financial markets analyst at Capital.com, attributed the negative market sentiment to Trump’s “cavalier approach to economic policy,” noting that, unlike his first administration, Trump is focused on structural economic changes that may sacrifice short-term growth for long-term goals.
US Treasury yields also dropped, with the 10-year yield falling 6 basis points to 4.257%, while the two-year yield decreased 4.5 basis points to 3.956%. The US Dollar Index, which measures the greenback against six major currencies, fell 0.1% to 103.59, with the euro gaining 0.3% to $1.0866 and the British pound rising 0.2% to $1.2946.
Trump’s trade rhetoric also weighed on market sentiment, as he warned Canada on Friday that reciprocal tariffs on dairy and lumber could be imminent. Additionally, he is considering sanctions on Russian banks and tariffs on Russian products to pressure Russia into ending its war in Ukraine. This geopolitical tension contributed to a drop in crude oil prices, with Brent crude falling 0.4% to $70.11 a barrel, and US West Texas Intermediate crude down similarly to $66.76 a barrel.
Gold, another traditional safe-haven asset, saw a modest increase of 0.15%, reaching $2,915 per ounce. Meanwhile, cryptocurrency bitcoin took a hit, falling 7.2% from Friday to $80,085.42, its lowest level this month. Despite earlier optimism surrounding the creation of a cryptocurrency reserve under Trump, the executive order announced on Friday disappointed investors by stating there would be no additional purchases of bitcoin.
With trade tensions rising and economic growth concerns deepening, investors are likely to continue closely monitoring geopolitical developments and economic data in the coming weeks.
