Futures for major U.S. stock indices point to a lower open on Monday, indicating that Wall Street could extend the losses experienced in last Friday’s session.
The markets remain unsettled due to President Donald Trump’s escalating trade disputes, following his recent letters to leaders of the European Union and Mexico threatening a 30 percent tariff set to take effect August 1.
Early this morning, Trump posted on Truth Social that the U.S. has been “ripen off” on trade for decades, costing the nation trillions.
“Countries should sit back and say, ‘Thank you for the many year’s long free ride, but we know you now have to do what’s right for America,’” Trump wrote. “We should respond by saying, ‘Thank you for understanding the situation we are in. Greatly appreciated!’”
In reaction, the EU has decided to delay the implementation of its retaliatory trade measures against the U.S. until early August, allowing additional time for negotiations.
European Commission President Ursula von der Leyen, speaking at a press conference on Sunday, said, “We will therefore also extend the suspension of our countermeasures till early August. At the same time, we will continue to prepare further countermeasures so we are fully prepared.”
She continued, “We have always been very clear that we prefer a negotiated solution. This remains the case, and we will use the time that we have now till the 1st of August (to negotiate).”
The EU had planned to enforce tariffs on $25 billion worth of American goods in retaliation to U.S. steel and aluminum duties starting Monday.
Meanwhile, investors are holding back ahead of key economic releases expected in the coming days, including inflation reports, retail sales data, and industrial production figures.
The earnings calendar heats up this week, with major corporations such as JPMorgan Chase (NYSE:JPM), Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS), Johnson & Jonson (NYSE:JNJ) and Netflix (NASDAQ:NFLX) set to report results.
On Friday, stocks recovered some losses after an early dip but closed slightly lower overall. All major indices declined, with the Nasdaq and S&P 500 retreating from record highs reached on Thursday.
The Dow dropped 279.13 points, or 0.6%, closing at 44,371.51. The Nasdaq slipped 45.14 points, or 0.2%, to 20,585.53, while the S&P 500 declined 20.71 points, or 0.3%, ending at 6,259.75.
Investor concern is centered on Trump’s intensifying trade disputes.
In a letter to Canadian Prime Minister Mark Carney posted on Truth Social, Trump announced a 35 percent tariff on Canadian goods, effective August 1.
He attributed the tariffs partly to Canada’s inability to stem the flow of fentanyl into the U.S. and warned of further tariff increases if Canada responds in kind.
“If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter,” Trump said.
In a “Meet the Press” interview with NBC’s Kristen Welker, Trump said he plans to impose broad tariffs of 15 to 20 percent on most U.S. trading partners.
He also indicated letters will soon be sent to EU members notifying them of updated tariff rates.
Overall, trading remained subdued as the market awaited important economic data releases.
Airline stocks retreated sharply after a strong rally in the previous session, with the NYSE Arca Airline Index falling 2.7 percent from Thursday’s four-month peak.
Biotech shares also fell, with the NYSE Arca Biotechnology Index down 1.5 percent.
Networking, housing, and pharmaceutical stocks saw notable declines, while gold stocks rallied alongside rising gold prices.
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