US Market Sell-Off: Dow futures fall 450 points as Wall Street braces for a volatile start
US stock futures are trading with steep cuts on Monday morning as Wall Street braces for a volatile start to the new trading week.
Futures tied to the Dow Jones are down over 400 points, while those on the S&P 500 are down over 60 points or 15. Nasdaq futures too are trading with losses of over 250 points.
Benchmark indices are headed into the new trading week after reporting their worst weekly performance since September last year.
It was a very volatile session on Wall Street on Friday as the Dow Jones, which at one point was down over 450 points, recovered to end with gains of over 200 points. The recovery came after US Federal Reserve Chair Jerome Powell said that the economy is on firm footing despite the tariff-related uncertainties.
The initial fall on Friday came about after the Non-Farm payrolls for February were below expectations of 1,70,000, coming in at 1,51,000.
In an interview that aired Sunday, President Donald Trump responded to a question on Fox News about the possibility of a recession by saying the economy was going through “a period of transition.”
A gauge of the dollar held just shy of its lowest since November as confidence in further US economic outperformance faltered. Treasury yields slipped across maturities as investors sought the safety of fixed income assets. Gold inched up, while oil fell to near the lowest since September as weak economic data from China compounded a dour outlook for demand.
“It’s getting harder to make out the shape of the economy through the fog of Trump 2.0’s firings and tariffs,” said Ed Yardeni, president of Yardeni Research. “No wonder the stock market’s default position is risk-off and stocks have been correcting.”
Wall Street strategists have been debating whether the Trump administration would be swayed on its tariff plans as stocks tumble. The thinking being that Trump will ditch policies if the stock market — which he touts as a report card — drops and rattles investors. Various firms even mapped out how much pain Trump could tolerate in the S&P 500 Index before retreating. That index level became known as “the Trump put,” in reference to a put option.
“We turn tactically cautious on risk assets,” JPMorgan Chase & Co. analysts led by Fabio Bassi wrote. “The increase in policy uncertainty over the past couple of weeks, the volatility around a potential Russia/Ukraine ceasefire, and the unprecedented new information around the German/EU fiscal plans triggered an extremely volatile fortnight with abrupt adjustment of positions.”
(With Inputs From Agencies.)