U.S. stock futures slipped on Monday, as investors struggled to regroup after data showing weakness on the global economic front triggered the worst day for equities since the start of the year.
How are benchmark indexes trading?
In volatile action, Dow Jones Industrial Average futures YMM9, -0.07% were last down 31 points, or 0.1%, to 25,533, S&P 500 futures ESM9, -0.12% fell 6.2 points, or 0.2%, to, 2,805 and Nasdaq-100 futures NQM9, -0.37% slid 31 points, or 0.4%, to 7,337.50.
All three benchmarks suffered their biggest one-day drop since Jan. 3 on Friday, with the Dow Jones Industrial Average DJIA, -1.77% tumbling 460.19 points, or 1.8%, to 25,502.32. The S&P 500 index SPX, -1.90% fell 1.9% to 2,800.71 and the Nasdaq Composite Index COMP, -2.50% declined 2.5% to 7,642.67.
The Cboe Volatility Index VIX, +4.13% Wall Street’s so-called fear index, spiked 24% to 16.96 on Friday.
Read: 500 could fall 40% as yield curve inverts, says analyst of one of 2018’s best hedge-fund returns
What’s driving the market?
Asian shares tracked Friday’s Wall Street losses, as global-growth worries were back in focus for Monday. The Nikkei-225 index NIK, -3.01% gave up 3%, while Europe stocks also fell in early trading.
Read: The persistence of subzero rates in Europe may revive a perilous ‘quest for yield’
Futures initially rose in Asia after a long-awaited report by special counsel Robert Mueller’s investigation released on Sunday didn’t find evidence that the Trump campaign “conspired or coordinated” with Russia to influence the 2016 presidential election. Mueller also investigated whether Trump obstructed justice but didn’t come to a definitive answer.
Instead, investors were refocused on global recession fears sparked Friday by a round of weak March purchasing-managers-index readings in the eurozone that pointed to a further slowdown in activity. Compounding those fears, U.S. data later that day showed growth in the manufacturing sector slowed to a 21-month low in March.
Rattled investors poured money into bonds, forcing the spread between the 3-month Treasury bill and the 10-year note to invert for the first time since 2007. The yield-curve inversion—when the rate of longer-dated debt falls beneath its shorter-dated counterparts—is seen by many as an accurate recession indicator.
The yield on the 10-year note TMUBMUSD10Y, +0.94% was up 1 basis point at 2.454% on Monday.
Read: The yield curve inverted—here are 5 things investors need to know
Speaking in Hong Kong on Monday, Chicago Federal Reserve President Charles Evans, said it was prudent to remain patient and see what further data brings before deciding on further interest-rate moves.
“If growth runs close to its potential and inflation builds momentum, then some further rate increases may be appropriate over time to ensure that the economy settles in on its long-run sustainable growth path and that inflation runs symmetrically about our 2% target,” he said in prepared remarks, according to Reuters.
The U.S. economic calendar is empty for Monday, but fresh data on Europe showed the German business sentiment survey from the Ifo Institute rose to 99.6 in March from a forecast of 98.3, according to Dow Jones Newswires. The index fell to 98.5 in February.
Elsewhere, U.S. Treasury Secretary Steven Mnuchin and top U.S. trade negotiator Robert Lighthizer will return to Beijing for trade talks.
What are strategists saying?
“Things may calm down if we feel some good vibrations from the trade talks in Beijing later this week, but it could be a rocky few days to start,” said Jeffrey Halley, senior market analyst at OANDA, in a note to clients.
“Things could get worse from here. Bond yields are the worry here—the U.S. 10yr has fallen to 2.44%, while bunds are negative again. Across the piece global bond yields are faltering. On Friday the market paid attention as the 3m-10yr yield inverted—this was a big flashing warning light,” said Neil Wilson, chief market analyst for Markets.com, in a note to clients.
Which stocks were focus?
Shares of Apple Inc. AAPL, -2.07% could draw attention on Monday with its “special event” that is expected to include the unveiling of its much-anticipated streaming-video service, along with updates for its iPad and Mac computers. The Wall Street Journal reported that Apple will charge for the service, with subscriptions to HBO, Showtime and Starz for $9.99 a month, but not to Netflix Inc. NFLX, -4.46%
What are other markets doing?
European equity markets were tilting lower, with the Stoxx 600 Europe index SXXP, -0.30% down 0.8% after sliding 1.2% on Friday, its biggest single-day decline since Feb. 7. Asian stock markets closed lower, with Japan’s Nikkei, Hong Kong’s Hang Seng Index and China’s Shanghai Composite Index all edging down.
In commodities markets, crude oil prices CLK9, +0.07% fell, while gold prices GCJ9, +0.35% gained, and the U.S. dollar DXY, -0.08% remained weak.
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