US Stocks to Resume Slide as Growth Concerns Weigh: Markets Wrap
(Bloomberg) -- Wall Street was set to resume its slide and gold hit new record highs as concerns grew over the economy and developments around Gaza and Ukraine dented sentiment.
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Futures for the S&P 500 and Nasdaq 100 slipped at least 0.2% as Russian President Vladimir Putin was said to be demanding a suspension of all weapons deliveries to Ukraine during a ceasefire proposed by Donald Trump. Meanwhile, Israel shattered a nearly two-month ceasefire with Hamas by launching airstrikes across Gaza. Those events add to concerns the US economy is losing steam as a result of Trump’s trade and labor policies.
Oil prices rose for a third day, while gold prices rallied above $3,000 an ounce and gold exchange-traded funds saw a fifth day of inflows.
The tone in Europe was more positive, with the Stoxx 600 index climbing 0.7%. Investors focused on the prospect of hundreds of billions of euros in additional spending by Germany as the country’s parliament prepared to vote on a landmark fiscal bill. The plan, which is expected to boost economic growth across Europe, lifted the euro to a new five-month high. Optimism over Europe was amplified by a positive economic sentiment survey in Germany.
European equities are extending their year-to-date outperformance over Wall Street, with a Bank of America Corp. monthly survey showing investors’ weighting to European stocks at a mid-2021 high. US allocations, meanwhile, have fallen by a record amount in recent weeks.
“US equities are being challenged not only by trade and tariff uncertainty, but even more by uncertainty over the administration’s economic strategy,” Wolf von Rotberg, an equity strategist at Bank J. Safra Sarasin, said, noting Treasury Secretary Scott Bessent’s dismissal of the recent Wall Street selloff as a “healthy” correction.
“Long-term prospects for European equities have certainly improved, given the steeper growth trajectory in the years ahead,” he added.
Among individual US premarket movers, Nvidia Corp. rose ahead of chief executive Jensen Huang’s much-anticipated keynote speech at the company’s GAI conference. Tesla Inc. dropped and was set to extend this year’s 41% slide, amid signs the electric carmakerer’s owner Elon Musk has alienated its main customer base.
European auto stocks climbed, however, lifted by optimism around the outlook for electric vehicles after China’s BYD Co. unveiled rapid-charging EV models. Thyssenkrupp AG and BAE Systems Plc extended recent gains, as a Bloomberg analysis showed these firms stand to benefit the most from Germany’s spending splurge.
