Futures on Wall Street indices are slightly down, with the US2000 leading the sell-off (-4.1%), followed by the US100 (-3.1%) and significant declines in the US500 and US30 (both down 2.5%). The reason for this is the reciprocal 34% tariffs on the U.S., announced by China.
- Markets are concerned that this will increase costs for a large number of U.S. companies, especially the Mag7 (Apple, Tesla, etc.), driving domestic inflation even further and slowing US companies sales across the Chinese market. As a result, recession fears are rising and traders are increasing bets on Fed rate cuts, now seeing a 50% chance of as many as five cuts this year.
- Additionally, there are concerns that the U.S. may retaliate against Chinese tariffs, further escalating trade war tensions. The US100 is moving closer to the psychological barrier of 18,000 points ahead of the U.S. market open. UBS Global Wealth Management now expects U.S. GDP growth to fall below 1% in 2025, with the possibility of an intra-year recession, where GDP could contract by 1% from peak to trough.
US100 (D1 interval)
Source: xStation5
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