Global financial markets showed signs of strain to start the week, as US stock futures declined, the dollar weakened, and crude oil prices slumped following fresh developments in trade policy and energy supply.
The dip in sentiment comes just days after the S&P 500 notched its longest winning streak in two decades.
Futures for the S&P 500 and Nasdaq 100 each fell about 0.7%, while Dow Jones Industrial Average futures dropped 0.6%. The losses reflect investor caution amid mixed signals on US trade negotiations and the upcoming Federal Reserve policy decision, expected Wednesday. Despite recent equity gains, analysts say continued strength in US markets likely depends on clearer progress in talks with China.
Adding to the cautious mood, President Donald Trump indicated he would not meet with Chinese President Xi Jinping this week, despite suggesting that trade agreements with other partners could emerge soon. Uncertainty surrounding US trade policy has been a persistent driver of market volatility.
Meanwhile, the US dollar fell for a second consecutive session, boosting several Asian and emerging-market currencies. The Taiwanese dollar, in particular, jumped as much as 5%—its largest single-day gain since the 1980s—driven by speculation and currency hedging activity.
Crude oil prices also came under pressure. Brent fell more than 3% after OPEC+ announced a further increase in output, adding supply to a market already sensitive to weakening demand amid global trade tensions. US crude dropped 3.6% to near $56 per barrel, levels that some analysts warn could threaten the viability of domestic shale producers.
Gold rose 0.7%, as investors sought traditional havens amid market uncertainty. The bond market remained subdued, with no cash trading in Treasuries due to the holiday in the UK, though yields on German and British bonds moved modestly.
The week ahead is expected to be pivotal for markets. While the Federal Reserve is widely anticipated to hold interest rates steady, traders will closely watch its tone for any signs of a shift in stance due to slowing growth and trade-related risks. Economists at Goldman Sachs forecast the Fed could begin cutting rates as early as July, should the economic picture weaken further.
On the corporate front, energy giant Shell is reportedly evaluating a potential acquisition of rival BP, although no formal move has been made. Separately, Berkshire Hathaway confirmed that Warren Buffett will step down at the end of the year, ending his six-decade tenure at the helm of the conglomerate.
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