US financial markets have been facing significant challenges recently. With US stock futures continuing to decline and a succession of influential economic reports, investors are awaiting the release of some crucial reports that could significantly impact financial market movement. Markets are currently experiencing a state of tension and anxiety, against the backdrop of the trade war and the economic volatility that has taken hold. What is driving the markets now? And can trends change under the current circumstances?
US Stock Futures Continue to Decline
On Friday morning, US stock futures saw a significant decline. Global markets are experiencing a decline following the Trump administration’s announcement of comprehensive tariffs on imported goods. At 3:45 AM EST, S&P 500 futures fell approximately 30 points, or 0.5%. Nasdaq 100 futures fell about 65 points, or 0.4%, while the Dow Jones Industrial Average fell 255 points, or 0.6%. This sharp decline came amid growing concerns about the impact of the global trade war.
Since Trump announced a 10% tariff on imported goods, US markets have begun to decline significantly. Wall Street indices experienced their biggest drop in five years last Thursday. This massive decline in the indices stems from investors’ fears of the negative impact of the tariffs on US and global economic activity.
Investment bank JPMorgan indicated that the chances of a global recession will rise to 60% if the tariff plan continues. This number represents a significant increase from previous expectations of a 40% probability. This escalation in trade tensions poses a risk to the global economy.
US Jobs Report and Slowing Growth
Meanwhile, investors are awaiting the US jobs report for March 2025, which will be released later in the session. The report aims to provide a glimpse into the health of the US economy in light of the potential impact of the trade war on growth and inflationary pressures. The US economy is expected to add approximately 137,000 new jobs, down from 151,000 in the previous month. This is also significantly lower than the monthly average of 190,000 over the past six months.
Cutting government spending and businesses’ reluctance to increase hiring due to disruptions caused by tariffs are increasing economic challenges. This slowdown in job creation may indicate that the US economy is experiencing some stress, which is increasing market tensions.
Powell’s Speech on the Economic Outlook
Fed Reserve Chairman Jerome Powell’s speech will also be a focal point of the next session. The US Federal Reserve left interest rates unchanged at its last meeting in March 2025, reflecting the economic anxiety and stress facing the bank. Policymakers face a challenge in deciding whether to raise or lower interest rates amid high inflation and the possibility of a recession. Many analysts believe the Fed may be caught between the need to combat inflation and the fear of an economic recession. If the trade war and tariffs continue to impact the US economy, the Federal Reserve may be forced to make easing decisions. Expectations are for a 100 basis point interest rate cut this year, although this could significantly raise inflation. Some analysts believe even deeper rate cuts are needed if trade tensions persist.
Gold posts fifth straight weekly gain
Amid these economic fluctuations, gold prices continued to rise significantly. Prices of the yellow metal declined on Friday, but still recorded their fifth consecutive weekly gain. Gold benefited from the market turmoil, as investors embraced it as a safe haven against volatility in stock markets. Gold reached an all-time high on Thursday, reaching $3,168.04 per ounce, and despite a slight decline on Friday, the precious metal remained in a strong position.
Ed Yardeni, an economic commentator, predicted that gold prices would reach $4,000 per ounce by the end of the year. If tariffs continue to impact markets, gold could rise further. Meanwhile, HSBC raised its gold price forecasts for 2025 and 2026, noting that geopolitical risks such as the war in Ukraine and changes in US foreign policy are contributing to the rise in gold prices.
Oil Price Forecasts in the Current Situation
Despite gold’s gains, oil prices suffered a significant setback. On Friday, crude oil prices fell sharply, on track for their worst week in months. President Trump’s trade tariffs raised concerns about a global recession that could reduce oil demand.
Brent and West Texas Intermediate (WTI) crude futures fell sharply, with expectations of their biggest weekly loss since October 2024. OPEC+, a group of oil-producing countries led by Saudi Arabia and Russia, plans to accelerate production increases, further pressuring oil prices.
Goldman Sachs lowered its oil price forecast, indicating that Brent crude will average $69 per barrel in 2025, while it expects $66 for WTI. These forecasts indicate the continued challenges facing the oil sector amid the current economic climate.
Amid global economic turmoil, it appears that US stock markets may face additional challenges in the coming weeks. The escalation in the trade war and the possibility of an economic recession are increasing investor concerns.
