Futures tied to the Dow Jones Industrial Average dropped by 204 points, or 0.49%. S&P 500 futures and Nasdaq 100 futures tumbled 0.71% and 1.25%, respectively, extending Friday’s rout.
A slew of tariffs are set to go into effect on Wednesday, including a 25% tariff on cars not made in the US. That same day, the US President is also expected to announce reciprocal tariffs on a number of products from other countries.
Economists fear that tariffs will hit the US economy hard, even while limiting the Federal Reserve’s scope to cut rates by also lifting inflation in the short term.
“Recession risks have become elevated – to a 40% probability – on concerns that aggressive US policies hit business and household sentiment,” warned Bruce Kasman, chief economist at JPMorgan.
Goldman Sachs analysts are now assuming a 35% chance of a US recession, up from 20% previously, saying they expected Trump to announce reciprocal tariffs that average 15% across all US trading partners on April 2, according to a Reuters report.
Tariff uncertainty has weighed on equities, dragging stocks lower again on Friday to close the last full trading week of March. Over the weekend, Trump did little to ease concerns, as The Wall Street Journal reported Sunday that he recently urged his advisors to take a more aggressive stance on tariffs.
In an interview with NBC News on Saturday, the US President said that he “couldn’t care less” if foreign automakers increase their prices due to these new tariffs.
Amidst this, the three major averages are all on pace to end the month lower. The S&P 500 has fallen 6.3% for March, while the Dow Jones Industrial Average is poised for a 5.2% loss. The tech-heavy Nasdaq Composite has declined 8.1%.
Going ahead, traders will keep an eye on a heavy slate of economic data this week, most notably the March jobs report, which will be released on Friday (April 4).
With agency inputs