Recession Worries May Lead To Initial Sell-Off On Wall Street

The major U.S. index futures are currently pointing to a sharply lower open on Monday, with stocks likely to move back to the downside after ending last Friday’s highly volatile session mostly higher.

Concerns about the impact of President Donald Trump’s tariff policies may continue to weigh on Wall Street amid increasing worries the U.S. is headed for a recession.

In a Fox News interview on Sunday, Trump declined to rule out the possibility of a recession following his tariff actions on Mexico, Canada and China.

“There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America,” Trump told the “Sunday Morning Futures” program.

However, overall trading activity may be somewhat subdued as traders look ahead to the release of some key U.S. economic data in the coming days.

Reports on consumer and producer price inflation are likely to be in focus along with readings on consumer sentiment and inflation expectations.

Stocks saw significant volatility over the course of the trading session on Friday, as the major averages swung back and forth across the unchanged line before eventually closing firmly positive.

The major averages came under pressure after initially showing a lack of direction, with the Nasdaq and the S&P 500 hitting five-month intraday lows before rebounding in afternoon trading.

The major averages held onto their gains going into the close of trading. The Nasdaq advanced 126.97 points or 0.7 percent to 18,196.22, the S&P 500 climbed 31.68 points or 0.6 percent to 5,770.20 and the Dow rose 222.64 points or 0.5 percent to 42,801.72.

Despite ending the day higher, the major averages all posted steep losses for the week. The Nasdaq plunged by 3.5 percent, the S&P 500 tumbled by 3.1 percent and the Dow slumped by 2.4 percent.

The volatility on Wall Street came following the release of a closely watched Labor Department report showing employment in the U.S. increased by slightly less than expected in the month of February.

The report said non-farm payroll employment climbed by 151,000 jobs in February after rising by a downwardly revised 125,000 jobs in January.

Economists had expected employment to grow by 160,000 jobs compared to the addition of 143,000 jobs originally reported for the previous month.

The report also said the unemployment crept up to 4.1 percent in February from 4.1 percent in January, while economists had expected the unemployment rate to remain unchanged.

While the report added to recent concerns about the strength for the economy, the data may also have generated some optimism about the outlook for interest rates.

Bargain hunting may have contributed to the afternoon recovery, which came even though Federal Reserve Chair Jerome Powell reiterated the central bank does not “need to be in a hurry” to adjusted interest rates amid uncertainty about the effects of President Donald Trump’s policy changes.

Powell argued during remarks at the University of Chicago Booth School of Business 2025 U.S. Monetary Policy Forum that the Fed is “well positioned to wait for greater clarity” about the impact of Trump’s policy changes.

Semiconductor stocks showed a substantial turnaround over the course of the session, with the Philadelphia Semiconductor Index surging by 3.2 percent after hitting a seven-month intraday low in late morning trading.

Interest rate-sensitive utilities and telecom stocks also turned in strong performances on the day, driving both the Dow Jones Utility Average and the NYSE Arca North American Telecom Index up by 2.0 percent.

Oil producer stocks also saw considerable strength amid a notable increase by the price of crude oil, while significant weakness remained visible among airline and retail stocks.

Commodity, Currency Markets

Crude oil futures are rising $0.50 to $67.54 a barrel after climbing $0.68 to $67.04 barrel last Friday. Meanwhile, after falling $12.50 to $2,914.10 an ounce in the previous session, gold futures are edging down $0.90 to $2,913.20 an ounce.

On the currency front, the U.S. dollar is trading at 146.90 yen versus the 148.04 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0847 compared to last Friday’s $1.0833.

Asia

Asian stocks turned in a mixed performance on Monday amid lingering tariff worries, the threat of a U.S. recession and signs of deepening deflationary pressures in China.

The dollar began the week on a sluggish note after falling more than 3 percent last week against major rivals on concerns about tariffs and its impact on the economy.

U.S. President Donald Trump in a Fox News interview on Sunday declined to rule out the possibility of a recession following his tariff actions on Mexico, Canada and China.

“There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America,” Trump told the “Sunday Morning Futures” program.

Gold edged up slightly after modest gains last week. Oil prices declined as lackluster inflation data from the leading importer, China, coupled with uncertainty surrounding the effects of U.S. trade tariffs left traders anxious about decreasing demand.

China’s Shanghai Composite Index dipped 0.2 percent to 3,366.16 after an announcement of fresh targeted levies on Canadian goods over the weekend.

Additionally, data showed consumer prices in China have plunged to their lowest level in more than a year, highlighting persistent deflationary pressures in the world’s second-largest economy.

Hong Kong’s Hang Seng Index tumbled 1.9 percent to 23,783.49, with property developers falling on concerns about China’s economic recovery.

Japanese markets ended mixed after a choppy session. The Nikkei 225 Index rose 0.4 percent to 37,028.27, while the broader Topix Index slipped 0.3 percent to 2,700.76.

Semiconductor-related shares advanced, with Advantest surging 3.7 percent and Tokyo Electron rising 1.7 percent. Technology investor SoftBank added 1.4 percent.

Seoul stocks closed higher, reversing losses from the previous session. The Kospi rose 0.3 percent to 2,570.39, led by auto and finance stocks.

Australian markets eked out modest gains, with mining and gold stocks pacing the gainers. The benchmark S&P/ASX 200 Index edged up by 0.2 percent to 7,962.30, while the broader All Ordinaries Index settled 0.2 percent higher at 8,191.70.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index jumped 0.9 percent to 12,515.97.

Shares of Fonterra Co-operative Group rallied 3.6 percent after the dairy giant lifted its full year earnings guidance, reflecting positive contributions from its consumer channel.

Europe

European shares have moved modestly lower on Monday after a week of high volatility on concerns about an escalating global trade war and its potential impact on global economic growth.

The German DAX Index is down by 1.6 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index are both down by 0.7 percent.

Data showed earlier today that German industrial output rose in January but exports plunged, showing the challenges facing the incoming government.

Defense stocks continued to rise, with Germany’s Rheinmetall rallying nearly 2 percent after EU leaders backed new defense spending plans.

British online food delivery platform Deliveroo has also moved to the upside after saying it would end operations in Hong Kong next month.

Watches of Switzerland Group shares have also jumped after the company announced a share buyback program.

Assura shares have surged as a consortium led by KKR & Co increased its takeover offer for the U.K. health-care landlord.

U.S. Economic News

No major U.S. economic data is scheduled to be released today