S&P 500 Futures Drop Over 1% on Trump Tariff Fears

US markets start the week nervously, with S&P 500 futures initially falling over 1% after Donald Trump avoided answering whether his tariffs could trigger a recession. The Nikkei recovered from a six-month low, gaining 0.6%, while Hong Kong’s Hang Seng tumbled over 2% amid China’s deepening deflation concerns. European markets look more optimistic, with STOXX 50 futures up 0.8% as Germany shifts toward looser fiscal policies.

Equities

The FTSE 100 ended flat on Friday and posted a 1.4% weekly decline, marking its worst week of the year as concerns over US trade policies unsettled investors. The FTSE 250 dipped 0.2%, registering its third consecutive weekly loss.

Among individual stocks, Burberry fell 6.8%, dragging down the personal goods sector, as fears over US tariffs weighed on luxury stocks across Europe. Just Group tumbled 9.6% after missing estimates for pre-tax profit and tangible net asset value.

The oil and gas sector rose 0.9%, with Shell and BP both gaining around 1% following remarks from Russia’s Deputy Prime Minister suggesting that OPEC+ could reverse its planned output increase after April. Schroders dropped 5%, paring some of Thursday’s 12.6% surge, as the asset manager outlined cost-cutting measures.

In the US, the S&P 500 climbed 0.55% on Friday, rebounding from early losses following comments from Federal Reserve Chair Jerome Powell, who reassured markets that the economy remains “in a good place” but cautioned against rapid rate cuts. Despite Friday’s recovery, the index fell 3.1% over the week, its worst performance since September, while the Nasdaq slipped 3.45% and the Dow Jones dropped 2.37%. The Russell 2000 fell 3.86%.

Hewlett Packard Enterprise sank 12% after warning that US tariffs would impact its annual profit forecast. Costco fell 6% as the retailer’s quarterly earnings missed estimates, with rising merchandise costs squeezing margins. In contrast, Broadcom surged 8.6%, calming investor concerns over AI infrastructure demand with a strong second-quarter outlook.

Forex & Commodities

The US dollar weakened, trading near a four-month low against major currencies as concerns over tariffs and economic slowdown hit sentiment. The Japanese yen rose 0.25% to 147.68 per dollar, just below Friday’s five-month high of 146.94, while the Swiss franc climbed to a three-month high of 0.87665 per dollar. The euro remained steady at $1.0842 after recording its best weekly performance since 2009, boosted by expectations of increased government spending in Germany. Sterling touched a four-month high of $1.2946 before easing slightly.

Gold prices edged higher as a weaker dollar and trade tensions drove safe-haven demand. Spot gold rose 0.1% to $2,914.00 an ounce, with futures up 0.2% to $2,920.10. Analysts expect gold to surpass $3,000 per ounce in the coming months. Investors are now waiting for US inflation data, with the Consumer Price Index (CPI) due on Wednesday and Producer Price Index (PPI) on Thursday.

Oil prices fell as concerns over tariffs, rising OPEC+ production, and weaker economic growth weighed on sentiment. Brent crude dropped 6 cents to $70.30 per barrel, while West Texas Intermediate (WTI) slipped 8 cents to $66.96 per barrel. WTI has now declined for seven consecutive weeks, the longest losing streak since 2023. Saudi Aramco reduced crude prices for Asia for the first time in three months, while OPEC+ reaffirmed plans to increase output from April.