On March 10, Wall Street futures experienced a significant drop as the U.S. economy faces mounting challenges. The safe-haven yen and Swiss franc gained strength, reflecting investor anxiety over deflationary pressures in China and concerns about a slowing U.S. economy coupled with an escalating global trade war. As of 0137 GMT, the S&P 500 stock futures were down by 0.5%, while Nasdaq futures fell by 0.6%.
Recent data revealed that China's consumer price index plummeted at the sharpest rate in 13 months during February, indicating significant deflationary trends. Additionally, producer price deflation has now persisted for 30 consecutive months. In response, Beijing announced plans for more stimulus measures aimed at bolstering consumption and spurring innovation in artificial intelligence during the ongoing week-long National People's Congress, which concludes on Tuesday.
In a recent interview with Fox News, U.S. President Donald Trump refrained from predicting whether his tariffs on China, Canada, and Mexico could lead to a recession in the U.S. The ongoing trend of soft economic data continues to raise alarms, as recent figures indicated fewer jobs were created than anticipated in the last month, marking the first payroll report influenced by Trump's economic policies. Senior financial markets analyst at Capital.com, Kyle Rodda, suggested that Trump's aggressive approach to economic policy is unsettling market sentiment.
Rodda emphasized that unlike his first term, Trump seems committed to pursuing significant, structural changes to the economy, even if it adversely affects short-term growth. This shift in focus has made investors wary of the potential impacts on the broader economy.
As these economic concerns unfold, U.S. Treasury yields have decreased, with the 10-year yield dropping as much as 6 basis points to 4.257%, and the two-year yield falling 4.5 basis points to 3.956%. Additionally, the U.S. dollar index, which gauges the currency against six major counterparts, eased by 0.1% to 103.59. In contrast, the euro appreciated by 0.3% to $1.0866, while sterling increased by 0.2% to $1.2946.
On Friday, President Trump issued further warnings to Canada, indicating that reciprocal tariffs on dairy and lumber could be on the horizon. Furthermore, he mentioned that he is contemplating sanctions on Russian banks and tariffs on Russian products as part of efforts to expedite an end to the ongoing war in Ukraine. These geopolitical tensions have adversely affected crude oil prices, with Brent crude declining 0.4% to $70.11 per barrel and U.S. West Texas Intermediate crude dropping similarly to $66.76 per barrel.
In the realm of traditional safe-haven assets, gold saw a slight increase of 0.15%, reaching $2,915 an ounce. In contrast, the cryptocurrency market faced challenges, with bitcoin plunging by 7.2% from Friday to hit a monthly low of $80,085.42. Despite earlier optimism surrounding regulatory loosening and the prospect of a cryptocurrency reserve under Trump's administration, bitcoin has struggled since peaking at an all-time high of $109,071.86 in January.
The long-anticipated executive order regarding the cryptocurrency reserve was released on Friday but left many investors disappointed, as it stated that there would be no additional purchases of bitcoin.
For further updates, stay tuned as we continue to monitor the evolving economic landscape and its impact on global markets.
