U.S. Stock Futures Plunge 2% Amid Economic Worries

U.S. stock futures extended their losses, with Nasdaq futures leading the decline, down by 2%. This downturn was part of a broader market sentiment marked by unease, as investors reacted to a series of economic reports and geopolitical developments. The Dow Jones Industrial Average and the S&P 500 also saw declines, with the Dow E-minis down 138 points, or 0.34%, and the S&P 500 E-minis down 42.5 points, or 0.77%. The Nasdaq 100 E-minis were down 215 points, or 1.09%, reflecting a significant drop in tech stocks.

The market's pessimism was fueled by a combination of factors, including weaker-than-expected economic data and ongoing trade tensions. The U.S. March trade deficit widened to a record high, which was a negative factor for the first-quarter GDP. Additionally, the U.S. February S&P CoreLogic composite 20 home price index rose by 4.5% year-over-year, which was weaker than expectations. The Conference Board's U.S. April consumer confidence index also fell to a nearly five-year low, indicating a weaker labor market and consumer sentiment.

The market's focus this week will be on the upcoming economic data releases, including the first-quarter GDP report, personal spending and income data, and the core PCE price index. These reports will provide further insights into the state of the economy and could influence the Federal Reserve's monetary policy decisions. The market is currently discounting a 10% chance of a 25 basis point rate cut after the May 6-7 FOMC meeting.

Corporate earnings reports have been mixed, with some companies exceeding expectations while others fell short. For instance, SBA Communications and Honeywell International reported better-than-expected earnings and raised their revenue outlooks, leading to significant gains in their stock prices. On the other hand, NXP Semiconductors and Regeneron Pharmaceuticals reported disappointing earnings, leading to declines in their stock prices.

The market's reaction to these developments highlights the ongoing uncertainty and volatility in the stock market. Investors are closely monitoring economic data and corporate earnings reports for any signs of improvement or deterioration in the market's outlook. The upcoming economic data releases and corporate earnings reports will be crucial in shaping the market's direction in the coming weeks.