(Bloomberg) — S&P 500 futures retreated after Treasury Secretary Scott Bessent dismissed recent declines as healthy, reinforcing the view that the Trump administration is unlikely to step in to boost markets.
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Contracts on the S&P 500 slipped 0.3% while those for the Nasdaq 100 were down 0.2%. Futures pared losses as some tech shares rose in premarket trading, with Nvidia Corp. higher ahead of its much anticipated conference on artificial intelligence.
However, Wall Street could stay under pressure from signs that no government support will be forthcoming to cushion the market impact of President Donald Trump policies. Bessent told NBC’s Meet the Press Sunday that he’s not worried by the slump in US stocks, after about $5 trillion was wiped from the S&P 500’s value.
“This statement caused some alarm for many Wall Street types who had been counting on Bessent to be the second Trump administration’s ‘voice of reason’ on economic policy,” said Benjamin Picton, a strategist at Rabobank.
The comments effectively dash prospects that policymakers will throw “liquidity bones to financial markets whenever they showed signs of wobbling,” Picton added.
Meanwhile, expectations are growing that a slowing economy could see the Federal Reserve cutting interest rates as many as three times this year, a shift from the one reduction that was priced last month. Retail sales data due later Monday are expected to reinforce the picture of a slowing economy, following on from below-forecast inflation readings last week. A weak print could weigh further on the Bloomberg dollar index which hit a four-month low Monday.
The Fed’s not expected to change rates at its policy meeting later this week, but investors will watch for clues on what kind of support could be offered to the economy. Chair Jerome Powell faces the task of assuring investors the economy remains on solid footing, while signaling policy support will be provided when required.
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Meanwhile, fears of a protracted global trade war are benefiting haven assets, with gold holding close to record highs around $3,000 an ounce, and Treasury yields edging more than three basis points, Bund yields dropped five basis points as jitters mounted over Tuesday’s parliamentary vote on Germany’s landmark spending package.
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