Global Markets Steady Amid Recession Fears and Inflation Concerns

Global stock markets and Treasuries steadied after steep declines, amid fears of a potential U.S. recession exacerbated by President Trump's comments. The Nasdaq and S&P 500 reversed some losses, while inflation concerns persist. Traders now expect significant Federal Reserve rate cuts amidst economic slowdown signs.

Following a day of dramatic losses, stock markets worldwide showed signs of stabilization on Tuesday. Both the S&P 500 and Nasdaq indicated slight positive movements, although European shares declined by 0.6%. This followed a hefty one-day Nasdaq drop, the largest since September 2022, as apprehension over a potential economic slump grew.

Contributing to the unease were President Trump's remarks hinting at a 'transition period', without ruling out recession. Monday saw the S&P 500 fall by 2.7%, while the Nasdaq plunged 4%. Market strategist Jacob Falkencrone noted the unpredictability stemming from new U.S. policies, tariffs, and economic data.

Despite these fluctuations, U.S. Treasury yields steadied following a rush to safety on Monday, where yields on 10-year notes declined by 10 basis points. Investors now predict aggressive Federal Reserve rate cuts, marking significant shifts from earlier positions. Upcoming U.S. inflation data may influence these expectations.

(With inputs from agencies.)