U.S. Stocks May Extend Pullback Amid Ongoing Tariff Concerns

The major U.S. index futures are currently pointing to a sharply lower open on Monday, with stocks likely to extend the significant pullback seen over the past few sessions.

The downward momentum on Wall Street comes amid ongoing concerns about the impact of President Donald Trump’s reciprocal tariffs on U.S. trade partners, which are due to be imposed on Wednesday, April 2nd.

Trump told reporters aboard Air Force One on Sunday that the reciprocal tariffs would target all countries and not just a smaller group with the biggest trade imbalances.

“You’d start with all countries,” Trump said. “Essentially all of the countries that we’re talking about.”

Traders worry Trump’s tariffs and possible retaliatory actions by targeted countries will fuel inflation, keep interest rates elevated and drag down global economic growth.

Extending the pullback seen during Wednesday and Thursday’s sessions, stocks moved sharply lower during trading on Friday. The major averages came under pressure early in the session and saw further downside as the day progressed.

The tech-heavy Nasdaq posted a particularly steep loss, plunging 481.04 points or 2.7 percent to a six-month closing low of 17,322.99. The S&P 500 also tumbled 112.37 points or 2.0 percent to 5,580.94, while the Dow slumped 715.80 points or 1.7 percent to 41,583.90.

The pullback more than offset a strong start to the week. The Nasdaq plummeted by 2.6 percent for the week, while the S&P 500 lost 1.5 percent and the Dow shed 1.0 percent.

The sell-off on Wall Street came amid concerns about the outlook for the economy following the latest data, including the Federal Reserve’s preferred readings on inflation.

While a Commerce Department report showed consumer prices increased in line with economist estimates, core consumer prices rose by slightly more than expected.

The Commerce Department said its personal consumption expenditures (PCE) price index rose by 0.3 percent in February, matching the increases seen in the two previous months as well as economist estimates.

The annual rate of growth by the PCE price index was 2.5 percent in February, unchanged from January and in line with expectations.

Meanwhile, the report said the core PCE price index, which excludes food and energy prices, climbed by 0.4 percent in February after rising by 0.3 percent in January. Economists had expected another 0.3 percent increase.

The annual rate of growth by the core PCE price index also accelerated to 2.8 percent in February from an upwardly revised 2.7 percent in January.

Economists had expected the year-over-year growth by the core PCE price index to tick up to 2.7 percent from the 2.6 percent originally reported for the previous month.

The report also showed real personal spending, which excludes price changes, inched up by just 0.1 percent in February after sliding by 0.6 percent in January.

“The acceleration in core PCE inflation and the softness in consumer spending is an unfavorable mix of economic data,” said Nationwide Chief Economist Kathy Bostjancic.

She added, “The data support our view that downside risks to the economy are emerging, but with inflation heating up, the Fed for now will maintain its wait-and-see approach.”

Stocks saw further downside after the University of Michigan released revised data showing consumer sentiment deteriorated by more than previously estimated in March.

The report also showed year-ahead and long-run inflation expectations surged by more than previously estimated during the month.

Computer hardware stocks showed a substantial move to the downside on the day, with the NYSE Arca Computer Hardware Index plunging by 3.1 percent to its lowest closing level in over four months.

Significant weakness was also visible among airline stocks, resulting in a 3.0 percent nosedive by the NYSE Arca Airline Index. The index plummeted to a six-month closing low.

Semiconductor stocks also saw considerable weakness, as reflected by the 3.0 percent plunge by the Philadelphia Semiconductor Index, which hit its lowest closing level in over a year.

Software, steel, retail and housing stocks also showed notable moves to the downside, while utilities stocks were among the few groups to buck the downtrend.

Commodity, Currency Markets

Crude oil futures are inching up $0.07 to $69.43 a barrel after falling $0.56 to $69.36 a barrel last Friday. Meanwhile, after jumping $23.40 to $3,114.30 an ounce in the previous session, gold futures are surging $42.20 to $3,156.50 an ounce.

On the currency front, the U.S. dollar is trading at 149.51 yen versus the 149.84 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0810 compared to last Friday’s $1.0828.

Asia

Asian stocks slumped on Monday as investors braced for U.S. President Donald Trump’s reciprocal tariffs beginning April 2. Trump announced that the upcoming tariffs on U.S. imports would apply to all nations, not just a select few.

It is feared that Trump’s economic policies and possible retaliatory actions by targeted countries will fuel inflation, keep interest rates elevated and drag down global economic growth.

The Trump administration is optimistic about U.S. growth prospects, but several key indicators that experts are monitoring suggest that the U.S. was being pushed into a recession.

A weaker dollar and falling bond yields lifted bullion to a new record high above $3,100 per ounce in Asian trading, while oil was little changed after Trump threatened Russia with further oil sanctions.

Chinese shares ended slightly lower after rising earlier on the back of positive manufacturing data.

An official survey showed Chinese manufacturing activity expanded at its fastest pace in a year in March after policymakers pledged to step up monetary and fiscal stimulus.

The benchmark Shanghai Composite Index dipped 0.5 percent to 3,335.75, while Hong Kong’s Hang Seng Index tumbled 1.3 percent to 23,119.58 on U.S. tariff fears.

Japanese markets plunged as Trump’s tariff threats stoked fears over Japanese auto and tech export demand. The Nikkei 225 Index dove 4.1 percent to 35,617.56, while the broader Topix Index settled 3.6 percent lower at 2,658.73.

Automakers led losses, with Toyota Motor, Honda, Mitsubishi and Nissan falling 3-4 percent. Market heavyweight SoftBank Group gave up 5.6 percent and Fast Retailing, the operator of Uniqlo, tumbled 3.7 percent.

Seoul stocks ended sharply lower on fears of escalating trading tensions and concerns about the global economic outlook.

The Kospi lost 3 percent to close at 2,481.12, marking its lowest level in nearly two months as authorities lifted the short selling ban.

Among the prominent decliners, Hyundai Mobis, Hyundai Motor, Celltrion and LG Energy Solution declined 3-6 percent.

Australian markets fell on tariff worries and ahead of the RBI interest-rate decision due this week.
The benchmark S&P/ASX 200 Index tumbled 1.7 percent to 7,843.40, dragged down by miners, financials and energy stocks. The broader All Ordinaries Index closed 1.7 percent lower at 8,053.20.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index edged down 0.1 percent to 12,270.

Markets in Malaysia, India, Singapore, and Indonesia were closed for the Eid-ul-Fitr holiday.

Europe

European stocks drifted have lower on Monday after U.S. President Donald Trump said upcoming tariffs would target all countries, stoking worries a global trade war could lead to recession.

In economic news, German import prices grew at the fastest pace in more than two years in February, while export prices were 2.5 percent higher than in the same period last year, marking the largest annual increase recorded since March 2023, according to data from Destatis released earlier today.

The German DAX Index is down by 2.1 percent, the French CAC 40 Index is down by 2.0 percent and the U.K.’s FTSE 100 Index is down by 1.4 percent.

Swedish automaker Volvo Car fell 1.2 percent after appointing Hakan Samuelsson as its new chief executive.

Fortnox AB soared 35 percent. Swedish buyout group EQT and investor First Kraft offered to buy the accounting software firm in a deal that values the company at around 55 billion crowns ($5.50 billion).

3i Infrastructure, a U.K. based investment company, declined about 1 percent after releasing a pre-close trading update for the year ending 31 March 2025.

Pennon Group shares tumbled 3 percent. The British utility said a water contamination outbreak which affected thousands of homes in a Southwest seaside resort pushed up ‘reshaping and transformation’ costs to around £36m.

Pets At Home Group plummeted almost 13 percent after it warned of lower profit in the 2026 financial year.

Associated British Foods tumbled 3.7 percent as Primark CEO Paul Marchant resigned amid an investigation into behaviour allegations.

U.S. Economic News

MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of March at 9:45 am ET. The Chicago business barometer is expected to dip to 44.1 in March from 45.5 in February, with a reading below 50 indicating contraction.