US stock futures fell sharply on Monday, as uncertainty over US President Donald Trump’s economic policies, particularly those related to tariffs, continued. This coincided with investors’ expectations for important economic data this week, in addition to developments in inflation in China.
Futures Fall Amid Trump’s Trade Policy Impact
US stock futures fell sharply on Monday, as speculation focused on how Trump’s trade policies, particularly those related to tariffs, will impact the market. This coincided with traders’ anticipation of several key economic data releases expected this week.
By 03:25 ET (07:25 GMT), Dow Jones futures were down 156 points, or 0.4%, while S&P 500 futures were down 27 points, or 0.5%. Meanwhile, Nasdaq 100 futures fell 118 points, or 0.6%.
Despite its gains at the end of last week, the S&P 500 had its worst week in six months. The tech-heavy Nasdaq Composite has fallen more than 10% since hitting a high in December, putting it in correction territory.
Last week, President Trump announced a temporary delay to 25% tariffs on most goods from U.S. trading partners, including Canada and Mexico. The delay was supported by previous trade deals signed during Trump’s first term. Despite the delay, investors remain concerned about Trump’s renewed threats and contradictory announcements on tariffs, reflecting confusion in the markets.
Trump has ruled out predicting a recession in the United States, while insisting that the U.S. economy is in a “transition” phase under his new economic policies. He pointed out that tariffs are still on the table, raising new questions about inflation and economic growth in the country.
Consumer expectations from the New York Fed: A look at inflation
While the focus on Trump’s trade policies continues, investors are watching a report from the New York Fed on consumer expectations for inflation. This report provides investors with an opportunity to understand the future trends of consumer expectations regarding the prices of goods and services.
In the latest Federal Reserve report for January, data showed that the growth expectations for prices over the one-year and three-year periods remained at a stable level of 3%. While the five-year expectations rose to 3% from 2.7% in December. This data shows a significant increase in long-term inflation expectations, which may help determine the Federal Reserve’s future economic policies.
A number of other important economic indicators are also scheduled to be released this week, including the Consumer Price Index and the Job Openings Index, which is one of the main indicators of labor demand in the US economy.
Oracle and Tech Results
Eye-to-eye is also on the results of major tech companies, including Oracle, which is expected to report its quarterly earnings this week. While Oracle has performed well recently thanks to increased demand for its cloud services, there are concerns that the slowdown in the broader tech sector could have negative effects.
Oracle, OpenAI, which developed the ChatGPT app, and Japan’s SoftBank recently announced a joint investment that will inject about $500 billion into developing artificial intelligence infrastructure in the United States. This project is a major boost for Oracle, as President Trump seeks to strengthen American dominance in the field of artificial intelligence.
Oracle will announce its financial results after the US markets close on Monday. Other companies, such as Adobe and DocuSign, will announce their results in the coming days, providing investors with more guidance.
Chinese inflation and its impact on the global economy
In China, recent data on consumer and production inflation showed that the world’s second-largest economy is continuing its deflationary trend. The figures show a sharp drop in prices in February, reflecting weak domestic demand in the country. Chinese officials may be forced to take additional stimulus measures to support economic growth in near future.
Government data released on Sunday showed that China’s consumer price index fell 0.7% from a year earlier, more than the 0.4% decline expected. The data also showed a slight decline of 0.2% in the index on a monthly basis, highlighting the urgent need for more stimulus from the Chinese government.
For its part, the Chinese government has pledged to increase fiscal spending this year to support growth at a time when economy is facing major challenges as a result of President Trump’s tariffs on Chinese imports.
Oil Prices and Challenges of US Trade Policy
In oil markets, prices settled at steady levels on Monday, amid growing concerns about the impact of Trump’s trade policy on global economic growth and, consequently, fuel demand. Oil prices will remain under pressure due to uncertainty over tariffs, while markets await reports on OPEC+ production and supply and demand levels in energy markets.
WTI crude oil futures fell for the seventh week in a row, while Brent crude futures fell for the third week in a row. Analysts said that “uncertainty over tariffs is the main factor behind the weakness in oil prices,” especially after weak inflation data from China, the world’s largest oil importer.
Economic impact on markets
Finally, focus remains on tariffs and their significant impact on the global economy, as Trump’s trade actions could cast a shadow over markets and increase uncertainty. Meanwhile, inflation expectations in the United States and China remain a focus for investors.
