U.S. equity futures moved sharply lower in early Monday trading, while the dollar and oil prices slumped, as investors looked to pause Wall Street’s longest rally in two decades amid tariff uncertainty that could deepen the domestic economic slowdown.
Stocks ended higher on Friday, with the S&P 500 rising nearly 1.5% to reclaim the level it traded at prior to President Donald Trump’s unveiling of ‘Liberation Day’ tariffs on April 2, powered in part by megacap tech gains and stronger-than-expected first quarter earnings.
With around 357 companies in the benchmark reporting, collective S&P 500 earnings are forecast to rise 13.6% from last year to $533.1 billion, a $12 billion improvement from early January forecasts.
Friday’s solid April jobs report, which showed 177,000 near hires and a steady unemployment rate, also lifted Treasury bond yields, with those upside moves holding into today’s session amid renewed inflation concerns tied to the President’s tariff strategies.
Federal Reserve Chairman Jerome Powell will unveil the central bank’s latest interest rate decision later this week.
Kevin Dietsch/Getty Images
Benchmark 10-year note yields were last marked at 4.322%, with 2-year notes trading at 3.824%.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.34% lower at $99.684.
Trump himself told NBC News in an interview broadcast over the weekend that he expects to announce new trade deals as early as this week, but also indicated that there are no scheduled talks with China, the U.S.’s largest and most-important trading partner.
“We’re negotiating with many countries, but at the end of this, I’ll set my own deals, because I set the deal, they don’t set the deal,” Trump later told reporters on Air Force One.
That’s weighing on sentiment heading into the start of the week, with investors now eying the Federal Reserve’s Wednesday policy decision for clarity on the central bank’s near-term rate path.
The CME Group’s FedWatch, a real-time tracker of market expectations, suggests little chance of an interest rate cut this month, with the odds of a reduction in June pegged at around 33.6%.
Related: April jobs report shows modest hiring slowdown but still solid labor market
Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500, which is now up 2.1% for the month, are priced for an opening bell decline of around 44 points.
The Dow Jones Industrial Average, meanwhile, is called 260 points lower with the tech-focused Nasdaq indicated 176 points lower.
Berkshire Hathaway (BRK.A) were in early Monday focus, falling 2.14% after billionaire investor Warren Buffett said he would step down as head of the investment group he founded six decades ago later this year.
Related: Warren Buffett plans to step down as Berkshire CEO
Global oil prices were also in focus, with WTI futures for June delivery falling 87 cents to $57.43 per barrel following a weekend move by OPEC members, along with Russia, to add another 400,000 barrel boost to overall production levels.
The weekend decision takes the cartel’s three-month production increase to just under 1 million barrels per day, and effectively unwinds around half of the cuts that were put in place in the spring of 2022.
More Economic Analysis:
Fed inflation gauge sets up stagflation risks as tariff policies biteU.S. recession risk leaps as GDP shrinksLike it or not, the bond market rules all
In overseas markets, Europe’s Stoxx 600 was marked 0.03% higher in early Frankfurt trading, with Britain’s FTSE 100 rising 1.17% in London.
Overnight in Asia, several major markets, including Japan, remained closed for annual holiday observances, with the regional MSCI ex-Japan benchmark rising 0.9% into the close of a quiet trading session.
