U.S. stock index futures declined on Sunday evening as investors grew increasingly risk-averse ahead of President Donald Trump’s April 2 deadline to impose additional trade tariffs. Concerns over a slowing economy also weighed on market sentiment.
Futures continued to drop following a poor performance on Friday, driven by higher-than-expected inflation figures. These figures raised fears that inflation could strain the U.S. economy and lead to sustained interest rates over time.
The market was further unsettled by a weekend report suggesting Trump would pursue broader and higher tariffs. Goldman Sachs also warned that the chances of a U.S. recession had increased.
By 20:05 ET (00:05 GMT), S&P 500 Futures had fallen 0.7%, settling at 5,585.75 points. Nasdaq 100 Futures dropped 1.2% to 19,217.50 points, while Dow Jones Futures were down 0.4%, at 41,693.0 points.
Trump’s Tariff Deadline Approaches
Trump is scheduled to announce new tariffs on April 2, a date he has called “liberation day.” Reports indicate that he plans to impose higher tariffs on a broader range of countries as part of his strategy to address perceived trade imbalances.
Last week, Trump surprised markets by imposing a 25% tariff on non-American cars, set to take effect on April 2. Trump may also announce tariffs on other sectors, including commodities, semiconductors, and pharmaceuticals.
The market is concerned that these tariffs, which will be paid by U.S. importers, could drive up inflation and hinder economic growth in the coming months.
Goldman Sachs now estimates there is a 35% chance of a U.S. recession within the next year, and it predicts inflation will exceed the Federal Reserve’s 2% target in 2025.
Wall Street Drops Amid Trade and Inflation Fears
Wall Street’s major indexes fell sharply on Friday after inflation data from the PCE price index, the Federal Reserve’s preferred measure, came in higher than expected for February. The higher inflation reading strengthens the case for the Fed to keep interest rates elevated for an extended period, especially with rising economic uncertainty.
Worries about inflation were compounded by fears over Trump’s tariffs.
Meanwhile, significant losses in major technology stocks, particularly in chipmaker NVIDIA (NASDAQ: NVDA), added pressure to Wall Street. The stock, along with other tech giants, was hit by reports that investment in artificial intelligence data centers—a key source of demand in the past two years—appears to be slowing as the sector reaches saturation.
On Friday, the S&P 500 fell nearly 2%, closing at 5,580.94 points. The Nasdaq Composite dropped 2.7% to 17,322.99 points, while the Dow Jones Industrial Average declined 1.7%, finishing at 41,683.90 points.
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