Wall Street Opens Lower Amid Rising Economic Concerns
Wall Street stock futures dropped sharply on Monday, reflecting growing unease about President Donald Trump’s economic policies. His protectionist measures and proposed federal workforce cuts are now weighing heavily on investor confidence.
Contracts tied to the S&P 500 fell 1%, while Nasdaq 100 futures dropped 1.1%. Tech-heavy stocks like Tesla and Nvidia led the decline, sliding further after last week’s losses.
Wall Street is showing signs of distress as Trump’s fiscal strategy introduces uncertainty into financial markets.
Treasury Yields Slide as Investors Flee Risk
As equities fell, Treasury yields dropped. The 10-year yield fell five basis points to 4.26%, marking a broader retreat in bond yields this month.
Investors see Wall Street’s recent weakness as a sign that the US economy may slow in the months ahead. This risk-off sentiment also pushed Bloomberg’s dollar index close to four-month lows.
The bond market’s moves often mirror investor expectations for growth. Lower yields signal growing caution around economic performance.
Tariffs and Budget Cuts Hammer Confidence
President Trump’s tariff campaign and sweeping cuts to federal jobs are sending shockwaves through Wall Street. Treasury Secretary Scott Bessent warned of “disruption” and ruled out government efforts to support markets.
Morgan Stanley now predicts a 5% dip in the S&P 500 in early 2025. JPMorgan analysts echoed this pessimism, turning cautious on Wall Street’s risk assets.
“Growth headwinds are becoming more visible,” noted Sanford C. Bernstein strategist Rupal Agarwal.
Technology and Crypto Stocks Take the Hit
Tech stocks, especially AI-related names, bore the brunt of the sell-off. Tesla slid 3% in premarket trading, with Nvidia and other Big Tech names also trending lower.
Crypto-linked stocks suffered, too. Coinbase lost ground after being excluded from the S&P 500, while Bitcoin extended its losing streak, falling 0.8% to $82,412.
Despite Trump’s earlier pro-crypto rhetoric, Wall Street sentiment has cooled significantly.
Global Markets Mirror Wall Street’s Weakness
The Stoxx Europe 600 index fell 0.4%, while MSCI Asia Pacific and Emerging Market indices dropped 0.7% and 1.1%, respectively.
Hong Kong stocks also slumped as Chinese inflation dropped below zero, signaling weak consumer demand.
Wall Street’s movements continue to ripple across global financial markets.
What’s Ahead for Wall Street This Week?
Markets now await key economic data to gauge whether further weakness lies ahead for Wall Street.
Important releases include:
- US CPI and PPI reports
- Jobless claims and consumer sentiment data
- Central bank decisions from Canada and Europe
These data points could either confirm recession fears or provide relief to Wall Street bulls.