S&P 500 Futures Slide as Tariff Risks Grow; Bitcoin Drops as Trump’s Reserve Plan Fails to Impress

Stock Futures Decline as Traders Brace for Inflation Data and Trade Uncertainty

Stock futures moved lower Monday as investors assessed inflation risks, shifting Federal Reserve expectations, and renewed trade policy uncertainty. This follows last week’s sharp losses across major indices, with risk sentiment deteriorating in early March.

S&P 500 futures declined 0.42%, Nasdaq 100 futures fell 0.53%, and Dow Jones Industrial Average futures lost 144 points, or 0.34%. Last week, the S&P 500 posted a 3.10% decline—its worst since September—while the Nasdaq Composite fell 3.45%, and the Dow lost 2.37%. Small caps were hit hardest, with the Russell 2000 sinking 4.05%, its steepest drop since December.

Tariff Concerns and Inflation Data Take Center Stage

Uncertainty over U.S. trade policy remains a key risk after President Donald Trump confirmed that reciprocal tariffs against U.S. trading partners will take effect on April 2. Concerns over supply chain disruptions and rising input costs have weighed on corporate earnings expectations, particularly in manufacturing and retail sectors.

Traders are also focused on inflation data, with February’s Consumer Price Index (CPI) set for release Wednesday. Economists expect a slight moderation after January’s sharp rise, but producer prices—due Thursday—could remain elevated due to higher import costs linked to tariff pressures. Persistent inflation could force the Fed to maintain its cautious stance on rate policy, adding another layer of market uncertainty.

Fed Policy and Consumer Sentiment in Focus

Federal Reserve Chair Jerome Powell reassured investors last week that the U.S. economy remains “in a good place” and that policymakers are prepared to hold rates steady until clearer economic signals emerge. However, softening consumer sentiment could complicate the Fed’s outlook.

The New York Fed’s consumer expectations survey on Monday and the University of Michigan sentiment index on Friday will provide further insights into spending patterns. A weakening outlook could reinforce expectations of lower growth, which may pressure equity markets further.

Crypto Markets Slide as Bitcoin Reserve Plan Disappoints

Bitcoin extended losses Monday, falling over 5% to $81,712, following the White House’s announcement of a strategic bitcoin reserve. Investors reacted negatively to the plan, which will be funded by seized assets rather than new purchases. Other cryptocurrencies, including Ethereum and XRP, also declined. While some analysts see the initiative as a long-term positive, near-term sentiment remains bearish.

Broad Market Outlook: Caution Prevails Across Asset Classes

Risk-off sentiment continues to dominate as traders position defensively ahead of key economic data. Equities face further downside risk if inflation data surprises to the upside, potentially pushing Treasury yields higher and weighing on growth stocks. Meanwhile, continued trade tensions could further erode corporate earnings expectations, particularly for multinational firms.

In commodities, oil prices remain sensitive to trade policy developments, while gold may benefit from increased safe-haven demand if market uncertainty persists. In fixed income, Treasury yields are likely to remain volatile as inflation data shapes Fed rate expectations.

Crypto markets remain vulnerable to further downside, but longer-term investors may see opportunities if Bitcoin’s role as a reserve asset gains traction. With multiple risk factors in play, volatility is expected to remain elevated across asset classes, keeping markets defensive in the near term.

More Information in our Economic Calendar.