US stock futures inch higher after selloff amid recession concerns
Spencer Platt/Getty Images
(NEW YORK) — U.S. stock futures traded slightly higher on Tuesday, following Monday’s major selloff as markets digested President Donald Trump’s comments that there would be a “period of transition” as the economy adjusted to a global trade war.
Dow futures traded up 156 points, or about 0.36%.
The Dow Jones Industrial Average closed down about 2% on Monday, while the S&P 500 declined 2.7%. The tech-heavy Nasdaq plummeted 4%, which amounted to more than $1 trillion in losses, according to Bloomberg.
Asian stocks, which opened sharply lower on Tuesday, following the U.S. selloff, recovered some ground. And European stocks were trading mixed.
The Bureau of Labor Statistics is expected Tuesday morning to release a report on how many jobs are open in the economy, which could provide another clue about the strength of economy amid the new recession concerns. An inflation report is expected Wednesday.
The main driver of the recent declines appears to be America’s trade war, with investors watching the administration’s latest plans on trade and tariffs. The selloff coincided with retaliatory tariffs against the U.S. following levies last week on Canada, Mexico and China, some of which were delayed.
This is a developing story. Please check back for updates.
(NEW YORK) — Homebuyers eager to forget this year’s housing market may ring in 2025 with an extra dash of zeal.
A rapid rise in home prices has coincided with stubbornly high mortgage rates, shutting out potential buyers with daunting costs.
A burst of supply could have eased prices, but no such relief was forthcoming. Instead, homeowners have balked at swapping out their current mortgage rates for higher ones, and construction has failed to make up for a long-standing shortage in new homes.
Unfortunately, next year’s housing market will likely bring more of the same, experts told ABC News.
Home prices may rise at a slower pace, offering a glimmer of hope as high mortgage rates fall slightly but continue to weigh on consumer activity, they said.
Still, the market appears locked into a fundamental mismatch of supply and demand set to frustrate buyers, the experts added.
“I don’t see much sunshine in the forecast,” Ken Johnson, chief of real estate at the University of Mississippi, told ABC News. “It’s going to be gloomy and overcast, but it’s not going to be stormy.”
An unusual trend has beguiled buyers: Home prices are soaring, despite a prolonged stretch of high mortgage rates that, in theory, should crimp demand and push down prices.
Market observers who spoke to ABC News said they expect both price increases and mortgage rates to ease in 2025 — but only a smidge.
The average rate for a 30-year fixed mortgage stands at 6.85%, FreddieMac data last week showed. That figure has ticked up slightly since the start of the year, despite a series of interest rate cuts at the Federal Reserve in recent months.
Earlier this month, Fed Chair Jerome Powell said rate cuts may slow over the course of 2025. Such a policy would leave mortgage rates higher for longer, experts said.
Redfin, a Seattle, Washington-based real estate giant, forecasts average 30-year fixed mortgage rates will remain in the high 6% range over the duration of 2025. Online real estate marketplace Zillow says mortgage rates will fall, but only moderately.
Alongside persistently high mortgage rates, experts predicted a continued, albeit slower, rise in home prices.
In September, Goldman Sachs predicted a 4.4% rise in home prices in 2025, which would mark a slight decline from the 4.5% rise in 2024.
The persistence of high mortgage rates will put some downward pressure on prices, since demand will soften as many consumers forego expensive loans, experts said, but the high rates will also exacerbate a lack of supply that has kept prices soaring.
Current homeowners will want to remain locked into relatively low mortgage rates. Homebuilding will deliver much-needed supply of new homes, but it will fall well short of the amount required to meet demand, experts said.
“I don’t want to be the bearer of bad news, but it doesn’t feel like prices are going to moderate that much,” Marc Norman, associate dean at the New York University School of Professional Studies and Schack Institute of Real Estate, told ABC News. “If you don’t have a lot on the market, that’s going to put pressure on prices.”
Experts who spoke to ABC News acknowledged that economic forces could defy expectations, leaving the housing market in better or worse shape than anticipated.
Faster-than-expected progress in bringing inflation down to the Fed’s target level could free up the central bank to slash interest rates, which in turn would lower mortgage rates, some experts said. An economic downturn would damage household finances and ease demand, likely leading to a drop in home prices, they added.
If inflation proves more stubborn than expected, however, interest rates may stay high for even longer, experts said, which could put the housing market into an even deeper freeze.
For now, the outlook for 2025 appears clear, Christopher Mayer, a real estate professor at the Columbia University Business School, told ABC News.
“My best guess is that next year is a lot like this year,” Mayer said.
(ISSAQUAH ,WA) — In pursuit of increased wages and renegotiated employee benefits, more than 18,000 Costco union members nationwide voted to authorize a strike if the wholesale company doesn’t agree to their terms by Jan. 31.
The looming Costco strike marks the latest in a string of Teamsters union walkouts from employees of industry giants including Amazon and Starbucks.
The strike was approved on Sunday with more than 85% of Costco Teamsters voting in favor of hitting the picket lines if demands aren’t met.
The union said Costco had rejected contract proposals that included increased seniority pay, paid family leave, bereavement policies, sick time and safeguards against surveillance.
Bryan Fields, a Costco employee in Baltimore and member of Teamsters Local 570, told ABC News that the strike deadline comes after months of stalled conversations, extensions and failed negotiations with the company.
“They had plenty of months to negotiate and they would extend, extend, extend,” Fields, who has worked for the membership-only retailer for over a decade, claimed.
He and Teamsters spokesperson Matt McQuaid said negotiations with the company have been ongoing since August, without agreement.
ABC News has reached out to Costco Wholesale for a comment.
“No one wants to strike, no one’s excited about doing anything like that, and I’m sure they don’t want us to do that as well,” Fields said of the company, adding, “Let’s bypass all of that and just do what they promise in their code of conduct, which is ‘take care of employees.'”
According to Teamsters, Costco recently reported $254 billion in annual revenue and $7.4 billion in net profits, which marked a 135% increase since 2018.
While the details of the union’s negotiations with Costco’s top brass remain fluid, according to McQuaid, employees are “fully prepared” to picket come Feb. 1 if an agreement is not reached.
Last week hundreds of Costco Teamsters nationwide organized practice pickets from Hayward, California, to Sumner, Washington, and Long Island, New York, the organization said in a press release Sunday.
The 18,000 Teamsters union members who voted to authorize the strike account for 8% of Costco’s mostly non-union employees.
“Our members have spoken loud and clear — Costco must deliver a fair contract, or they’ll be held accountable,” Teamsters General President Sean M. O’Brien said in the release.
“From day one, we’ve told Costco that our members won’t work a day past January 31 without a historic, industry-leading agreement. Costco’s greedy executives have less than two weeks to do the right thing. If they refuse, they’ll have no one to blame but themselves when our members go on strike,” O’Brien added.
As of this month, there were 624 Costco Wholesale locations across the country.
The membership-only warehouse club chain is the third-largest retailer in the world behind Walmart and Amazon, with over 600 locations across the U.S.
Fields says employees who are the “backbone” of the multi-billion-dollar company’s success just want a “piece of the pie.” He hopes Costco can reach an agreement with union members before the strike terms expire, saying, “It’s in their hands right now.”
“The union is simply a voice of the people. They choose whether we become the weapon for the people. It’s as simple as that,” Fields said.
(NEW YORK) — The stock market fell on Monday after President Donald Trump slapped tariffs on Canada, Mexico and China, eliciting threats of retaliation and setting the stage for a trade war.
The Dow Jones Industrial Average slid about 550 points, or 1.25%, in early trading on Monday. The S&P 500 dropped 1.5%, and the tech-heavy Nasdaq plummeted 2%.
Traders demonstrated their jitters with a selloff of U.S. auto companies, which hold deep ties to suppliers in Canada and Mexico. Shares of General Motors plummeted 6%, while Ford saw its stock price plunge 4%.
The market rout extended worldwide. Japan’s Nikkei index fell 2.5% on Monday, and the pan-European STOXX 600 dropped about 1%.
On Saturday, Trump imposed 25% tariffs on products from Mexico and Canada, as well as 10% tariffs on goods from China. The tariffs are set to take effect on Tuesday, the White House said.
Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum both responded within hours of the announcement, vowing to retaliate.
Trudeau said Canada will implement 25% tariffs on $155 billion worth of U.S. goods, while Sheinbaum said she has instructed officials in her government to implement what she called Plan B, “which includes tariff and non-tariff measures in defense of Mexico’s interests.”
The tariffs imposed by the White House could raise prices for an array of products ranging from avocados to tequila to gasoline, experts previously told ABC News. The price impact remains unclear, however, since businesses within the supply chain could opt to take on some or all of the tax burden, they said.
Potential retaliatory tariffs issued by Canada and Mexico would make it more difficult for U.S. exporters to compete in those markets, raising the possibility of weaker sales.
This is a developing story. Please check back for updates.
