United States equity futures traded lower late on Sunday evening (Monday AEDT) after President Donald Trump proposed fresh tariffs on eight European countries, denting risk sentiment and driving demand for haven assets.
By 10:40 am AEDT (11:40 pm GMT), Dow futures fell 0.6%, S&P 500 futures dropped 0.7%, and Nasdaq 100 futures slid 1%.
Equity markets in the United States are set to remain closed on Monday for a public holiday.
Trump said over the weekend that a 10% tariff would be imposed on goods from eight European countries from 1 February, rising to 25% in June unless a deal is reached linked to a proposed “purchase of Greenland”.
The comments drew swift rebukes from European leaders, who are now poised to suspend approval of a trade agreement reached last year.
According to Bloomberg, French President Emmanuel Macron may push for activation of the European Union’s anti-coercion instrument, the bloc’s most powerful trade retaliation mechanism.
U.S. stocks ended Friday slightly lower after giving up earlier gains, closing down 0.1%. Sentiment turned after Trump indicated he may nominate someone other than National Economic Council Director Kevin Hassett to succeed Federal Reserve Chair Jerome Powell.
U.S. Treasury yields rose across the curve as traders scaled back expectations for rate cuts, amid increased speculation that former Fed Governor Kevin Warsh could be nominated as the next chair.
In Asia, early attention is also focused on Chinese economic data. Gross domestic product is expected to have grown 4.5% year-on-year in the December quarter, down from 4.8% previously, marking the weakest quarterly growth in three years.
