Global equity futures declined on Monday as speculation intensified over former President Donald Trump's proposed 25% tariffs on European imports, raising concerns of renewed trade tensions. The move has unsettled markets ahead of the US session, with key benchmarks reflecting growing risk aversion.
- S&P 500 futures down 0.7%, Dow Jones futures down 0.65%, Nasdaq 100 futures down 0.8%
- DAX futures declined 0.9% amid European market jitters
- Euro dropped to $1.0830, USDX rose 0.5% to 105.3
- Trump's proposed 25% tariffs on European imports under discussion
- Industrial, materials, and consumer discretionary sectors most affected
- Currency and equity markets reacting to escalating trade policy risks
Stock futures across major US and European indices fell sharply in early trading, signaling a risk-off sentiment following reports of Donald Trump’s plan to impose 25% tariffs on goods imported from Europe. The S&P 500 futures dropped 0.7%, while the Dow Jones Industrial Average futures declined 0.65%, and Nasdaq 100 futures shed 0.8%. In Europe, the DAX futures fell 0.9%, reflecting broad-based concerns among investors about the potential impact on multinational corporations and supply chains. The proposed tariffs, reportedly aimed at addressing trade imbalances and protecting domestic industries, mark a potential return to aggressive trade policies reminiscent of Trump’s first term. Sectors sensitive to international trade, including industrial, materials, and consumer discretionary, led losses. European auto manufacturers, aerospace firms, and tech exporters with significant US exposure are particularly vulnerable to the proposed measures. Currency markets reacted swiftly, with the euro dropping to $1.0830 against the US dollar, down 0.6% from Friday’s close. The US Dollar Index (USDX) climbed 0.5% to 105.3, reflecting increased demand for safe-haven assets amid rising geopolitical uncertainty. Analysts note that such tariffs could disrupt global supply chains and prompt retaliatory actions, potentially triggering a broader trade war. The market volatility comes at a time of heightened political uncertainty, with Trump’s potential 2028 presidential bid gaining traction. Broader implications include higher input costs for US manufacturers, reduced corporate earnings forecasts, and diminished investor confidence. The situation remains fluid, with no official policy announcement yet, but futures movements suggest that financial markets are pricing in a significant risk premium.