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Stock prices remain under pressure, as the weekend headlines failed to bring any reprieve with respect to the market's fear that the U.S.'s approach to reciprocal tariffs will trigger a global recession.
Currently, the S&P 500 futures are down 87 points and are trading 1.8% below fair value, the Nasdaq 100 futures are down 370 points and are trading 2.2% below fair value, and the Dow Jones Industrial Average futures are down 710 points and are trading 1.9% below fair value.
Hard as it may be to believe, that is actually an improvement from overnight when the Dow Jones Industrial Average futures, for instance, were down more than 1,600 points.
It was a rough overnight session as foreign markets cratered on follow-through selling interest. Hong Kong's Hang Seng plummeted 13.2%; China's Shanghai Composite dropped 7.3%; Japan's Nikkei fell 7.8%; and the STOXX Europe 600, as of this writing, was down 5.0%.
Trump administration officials in weekend interviews were largely dismissive of the market sell-off last week and downplayed the idea that the reciprocal tariffs will induce a recession. The 10% baseline tariff rate for all countries is in effect while larger country-specific tariffs are scheduled to take effect Wednesday, April 9.
President Trump again poured cold water on the so-called "Trump put," having said that he does not want to see stocks go down but that, "sometimes you have to take the medicine." The "Fed put" isn't in play at this time either. Fed Chair Powell noted Friday that the FOMC will patiently wait for greater clarity before making any adjustments to policy.
Investors clearly are not waiting to make adjustments. The last few sessions have been dominated by selling interest wrapped up in a negative outlook for the economy and earnings. The week ahead is going to feature the March CPI and PPI reports and the start of the Q1 earnings reporting period, when JPMorgan Chase (JPM), Morgan Stanley (MS), Wells Fargo (WFC), BlackRock (BLK), and BNY Mellon (BK) release their results before Friday's open.
It is a long time between now and Friday, but the pressing worry on the market's mind is that it may take a long time for the global economy to recover from the tariff shock, which in turn is fueling doubt about the ability to meet higher earnings estimates.
