Following the downturn seen over the course of the previous session, stocks are likely to see continued weakness in early trading on Monday. The major index futures are currently pointing to a sharply lower open for the markets, with the S&P 500 futures down by 1.6 percent.
Concerns about a global trade war are likely to weigh on Wall Street after President Donald Trump officially imposed a 25 percent tariff on imports from Canada and Mexico and a 10 percent tariff on imports from China.
A statement from the White House said Trump is taking “bold action to hold Mexico, Canada, and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country.”
Trump also threatened possible tariffs against the United Kingdom and the European Union, marking a significant escalation.
Canada and Mexico ordered retaliatory tariffs on American goods, while China vowed countermeasures. The EU also warned of firm retaliation if targeted.
Investors fear that a trade war could hit the earnings of major companies and dent global growth. The tariffs could also lead to renewed inflation fears, leading the Federal Reserve to keep interest rates on hold for longer.
Shortly after the start of trading, The Institute for Supply Management is scheduled to release its report on manufacturing activity in the month of January.
The ISM’s manufacturing PMI is expected to inch up to 49.8 in January from 49.3 in December, but a reading below 50 would still indicate contraction.
The Commerce Department is also due to release its report on construction spending in the month of December. Construction spending is expected to rise by 0.2 percent in December after coming in unchanged in November.
After showing a strong move to the upside early in the session, stocks came under pressure over the course of the trading day on Friday. The major averages pulled back well off their early highs and into negative territory.
The major averages finished the day just off their lows of the session. The Dow slid 337.47 points or 0.8 percent to 44,544.66, the S&P 500 fell 30.64 points or 0.5 percent to 6,040.53 and the Nasdaq dipped 54.31 points or 0.3 percent to 19,627.44.
For the week, the Dow rose by 0.3 percent, but the S&P 500 slumped by 1.0 percent and the Nasdaq tumbled by 1.6 percent.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan’s Nikkei 225 Index plunged by 2.7 percent, while Australia’s S&P/ASX 200 Index tumbled by 1.8 percent.
The major European markets have also shown notable moves to the downside. While the German DAX Index is down by 1.6 percent, the French CAC 40 Index is down by 1.4 percent and the U.K.’s FTSE 100 Index is down by 1.3 percent.
In commodities trading, crude oil futures are jumping $1.47 to $74 a barrel after slipping $0.20 to $72.53 a barrel last Friday. Meanwhile, after falling $10.20 to $2,835 an ounce in the previous session, gold futures are climbing $16.70 to $2,851.70 an ounce.
On the currency front, the U.S. dollar is trading at 154.74 yen versus the 155.19 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0266 compared to last Friday’s $1.0362.
Business News
U.S. Stocks May See Early Sell-Off As Trump Implement Tariffs
2025-02-03 13:48:02
