U.S. futures suggested a downturn in Wall Street’s opening on Monday, as the latest series of threats in the U.S. tariff disputes caused unease among investors. Nevertheless, there was still a degree of optimism that this would primarily be perceived as mere posturing from President Donald Trump.
S&P 500 futures and Nasdaq futures both fell by 0.3%. The earnings season begins this week, with major banks set to report on Tuesday. As per LSEG IBES, S&P companies are expected to show a 5.8% rise in profits compared to the same quarter last year, which is a reduction from the previously projected 10.2% increase as of April 1.
MSCI’s most comprehensive index of global equities (. MIWD00000PUS), opens new tab, decreased by 0.1%, while the pan-European STOXX 600 index (. STOXX), opens new tab, fell by 0.4%. Other regional indices also experienced declines, except for the UK’s FTSE 100, which rose by 0.4%.
On Saturday, Trump announced his intention to implement a 30% tariff on most imports from the European Union and Mexico starting August 1, despite being engaged in prolonged negotiations.
The European Union announced that it would prolong the suspension of countermeasures against U.S. tariffs until early August and will persist in advocating for a negotiated resolution. However, Germany’s finance minister urged for decisive measures should the tariffs be implemented.
On Monday, German 10-year government bond yields momentarily reached their highest level since early April before retracting to 4.60%. It is important to note that yields move in the opposite direction to prices.
“To employ the most prominent cliche available, it remains a rollercoaster experience for everyone tracking the trade narrative, despite the market’s gradual ability to manage its unease and guarantee that it is sufficiently supplied with motion sickness medication,” stated Deutsche Bank strategist Jim Reid.
An increase in Japanese government bond yields has also contributed to rising borrowing costs in other areas, according to Jens Peter Soerensen, the chief analyst at Danske Bank. JGB yields have surged amid growing concerns that an impending election may lead to heightened fiscal spending.
Chinese blue chips (. CSI300) closed 0.1% higher, as new data indicated that annual export growth exceeded expectations at 5.8% in June, despite a nearly 10% decline in exports to the U.S. Retail sales data, industrial production, and gross domestic product figures are scheduled for release on Tuesday.
