The US stock market suffered further losses as stock futures dropped sharply on Sunday night, signaling another challenging week for investors.
Futures linked to the S&P 500 fell 0.8%, while Nasdaq 100 futures declined nearly 1%. Dow Jones futures lost 268 points or 0.6%, according to CNBC. These declines followed a rough week: the S&P 500 dropped 3.10%, the Dow fell 2.37%, and the Nasdaq Composite tumbled 3.45%, marking its worst performance since September.
Economic reports and Inflation concerns
Investors are bracing for a week packed with key economic data that could further impact market sentiment. The New York Federal Reserve’s consumer expectations survey is set to be released on Monday, but the primary focus remains on inflation. The Consumer Price Index (CPI) for February will be published on Wednesday, followed by the Producer Price Index (PPI) on Thursday. The University of Michigan’s consumer sentiment index will come out on Friday.
Bill Adams, chief economist at Comerica Bank, expects inflation to have risen more moderately in February compared to the previous month. However, trade tensions and tariffs continue to exert upward pressure on producer prices. Federal Reserve Chair Jerome Powell acknowledged market uncertainty, stating that the central bank remains committed to analyzing economic data carefully before adjusting interest rates.
Biden Administration’s economic policies and market reactions
The Biden administration’s economic policies have added to investor uncertainty. Treasury Secretary Scott Bessent acknowledged on Friday that the economy is facing challenges. While some investors hope for government intervention to stabilize the markets, President Donald Trump downplayed concerns, stating last week that he is “not even looking at the stock market.”
Commerce Secretary Howard Lutnick has sent mixed signals on tariffs, leaving investors uncertain about potential policy shifts. With the national debt at $36 trillion and an ongoing worker shortage in manufacturing, analysts question the effectiveness of tariffs in stabilizing the economy. Concerns over trade policies and inflation have contributed to widespread market unease.
Bitcoin declines following US Strategic Reserve announcement
The crypto market also experienced a selloff, with Bitcoin dropping over 5% to trade at $80,622 early Monday, according to CoinGecko. Ethereum and XRP saw losses of 6% and 7.5%, respectively. The decline followed Trump’s executive order, which established a US strategic Bitcoin reserve. The reserve will consist of Bitcoin seized from criminal and civil forfeiture cases, with no current plans for government purchases.
Bitcoin price chart. Source: Jai Hamid/TradingView
The financial sector showed diverse responses because investors did not receive big Bitcoin acquisitions from the US government. According to Matt Hougan of Bitwise Asset Management the market misunderstood the announcement because he predicts Bitcoin will become a more important geopolitical asset. White House Crypto and AI Czar David Sacks indicated that the government might acquire new assets through methods that do not impact existing budgets.
Investors face ongoing market uncertainties because of the continuous market turbulence. Marke trends derive from inflation reports and economic policies along with crypto developments serving as key indicators that all focus on Washington and the Federal Reserve to detect any signs of stability.