European stocks are set to open slightly higher on Tuesday, following a steep decline in the previous session, as global markets remain under pressure from ongoing economic uncertainty and recession fears.
U.S. stock futures edged higher, while Treasury yields continued to slide, reflecting investor caution over U.S. tariff policy and concerns about a potential slowdown in the world's largest economy. Despite the recent sell-off, a White House official dismissed the market volatility, pointing to strong investment commitments from business leaders in response to President Trump’s economic agenda.
Investor sentiment remains fragile, with markets awaiting key U.S. inflation data this week, including consumer price index (CPI), producer price index (PPI), and consumer sentiment reports. These indicators are expected to provide further insight into inflation trends and the economic growth outlook.
In Asia, equity markets recovered from earlier losses as traders increased their bets on Federal Reserve interest rate cuts. Market participants are now pricing in 88 basis points of Fed rate cuts in 2025, up from 75 bps just a day earlier.
Meanwhile, gold prices climbed toward $2,900 per ounce, supported by a weaker dollar and rising demand for safe-haven assets. The Japanese yen hit a five-month high, reflecting heightened market risk aversion.
Oil prices extended losses amid weakening demand forecasts and ongoing uncertainty regarding OPEC+ supply strategies.
On Monday, U.S. equities suffered significant declines, with the Nasdaq Composite tumbling 4%, the S&P 500 falling 2.7%, and the Dow Jones dropping 2.1%. European benchmarks followed suit—the STOXX 600 lost 1.3%, Germany’s DAX fell 1.7%, while France’s CAC 40 and the U.K.’s FTSE 100 both shed around 0.9%.
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