Stocks finished lower amid escalating trade war concerns. Longer-dated Treasury yields rose, reversing earlier declines, after German debt brake deal. The dollar slipped, while safe-haven gold gained. Oil prices hit 6-month low on OPEC+ output increase announcement and pause in Ukraine aid.
After a run of soft data in recent weeks, market players will be eyeing a series of upcoming economic reports. The ADP National Employment Report is expected to show U.S. private payrolls increased by 140,000 last month, after a rise of 183,000 in January. The Institute for Supply Management’s nonmanufacturing PMI is likely to have slipped a notch to 52.6 in February, from 52.8 in the previous month. Separately, factory orders are expected to have rebounded 1.6% in January, after tumbling 0.9% in December. S&P Global's final composite and services PMIs are also due for release.
Campbell's is expected to report a rise in second-quarter revenue, supported by strong demand for its soups and frozen meals. Investors will look out for comments on annual forecasts, consumer spending, and competition.
Apparel retailer Abercrombie & Fitch is expected to post a rise in fourth- quarter revenue, helped by resilient demand for its products including footwear and accessories. Investors will look for comments on demand, impact of investments and costs as well as annual forecasts.
Jack Daniel’s parent, Brown-Forman, is expected to report a marginal rise in third-quarter revenue owing to softer consumption trends in the U.S. spirits market. Investors will watch for any comments on potential tariff impact, challenging operating backdrop and cost-saving efforts.
On the Latin American front, Brazil's composite and services PMI numbers for February are scheduled for release. The country’s January composite PMI fell to 48.2 from 51.5 in December, while the services PMI dropped to 47.6 from 51.6 in December.
Stocks finished lower as trade tensions escalated following U.S. President Donald Trump's new tariffs on Canada, Mexico and China. "Equity valuations have been very elevated and there's been yellow flags all over the horizon given moves to cut government spending," said Ben McMillan, chief investment officer at IDX Insights in Tampa, Florida. "Now on top of that, we have all this rhetoric around tariffs." The CBOE market volatility index rose 0.70% to its highest since December 20. "The fear here is that it's going to slow (economic) growth," said Adam Sarhan, CEO of 50 Park Investments in New York. "And when you have a slowdown in economic conditions, it's a situation where banks specifically make less money because fewer goods and services are traveling through the economy." The financial sector was down 3.54% at 829 and industrials fell 1.96% to 1,113.56. The S&P 500 lost 1.22% to end at 5,778.15, while the Nasdaq Composite was 0.35% lower at 18,285.16. The Dow Jones Industrial Average fell 1.55% to 42,520.99.
Longer-dated Treasury yields reversed earlier declines, as political parties in Germany reached a deal to overhaul borrowing rules and create a new infrastructure fund. "The fresh spending by Germany would lead to issuance and is somewhat stimulative. So that was definitely one of the factors among a few different things at the same time,” said Dan Mulholland, head of rates - trading & sales, Crews & Associates, New York. The benchmark 10-year notes fell 1/32, yielding 4.2423%. 30-year bonds were 1-10/32 lower to yield 4.5433%. Two- year notes were flat, yielding 3.9802%.
The euro rallied against the dollar after Germany's conservatives and Social Democrats announced proposals to set up a 500-billion-euro fund for infrastructure and overhaul borrowing rules aimed at increasing defense spending. The single European currency also gained on news that the Trump administration and Ukraine plan to sign a minerals deal on Tuesday follow a contentious meeting in the Oval Office on Friday between Ukrainian President Volodymyr Zelenskiy and U.S. President Donald Trump. The euro hit a three-month high of $1.0599. It was last up 1.27% at $1.0619. The dollar index was 1.06% down at 105.62.
Oil prices fell to multi-month lows after reports of OPEC+ plans to proceed with output increases in April while further price pressure was applied by U.S. tariffs on Canada, Mexico and China as well as Beijing's retaliatory tariffs. OPEC+, the Organization of the Petroleum Exporting Countries and allies including Russia, decided on Monday to proceed with a planned April oil output increase of 138,000 barrels per day, its first since 2022. The move took the market by surprise, said Bjarne Schieldrop, chief commodities analyst at SEB. "The change in OPEC strategy looks like they are prioritising politics over price. Those politics are likely connected with the wheeling and dealing of Donald Trump," Schieldrop said, referring to the U.S. president's calls for lower oil prices. Brent futures were down 0.75% at $71.08 a barrel. The session low was $69.75 a barrel, its lowest since September. U.S. West Texas Intermediate (WTI) crude futures was off 0.16% at $68.26 per barrel. The benchmark previously dropped to $66.77 a barrel, the lowest since November.
Gold prices rose, driven by a weaker dollar and heightened safe-haven demand amid escalating trade conflicts following U.S. President Donald Trump's imposition of new tariffs. "The implementation of tariffs brings a high level of uncertainty to the markets, and safe-haven products like gold and silver continue to do well," said David Meger, director of metals trading at High Ridge Futures. "The dollar has been under pressure against some of the other major currencies, so that has been supportive as well," he added. Spot gold was up 0.70% at $2,914.11 an ounce. U.S. gold futures was 0.91% higher at $2,927.50 an ounce.
